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Felda Said to Raise $3.3 Billion in Malaysian Share Sale

Felda Said to Raise $3.3 Billion in Second-Biggest 2012 IPO
Felda has about 355,864 hectares (878,984 acres) of plantations in Malaysia in addition to land in Indonesia. The company also has palm oil refining businesses in China, Indonesia, Turkey and South Africa, according to its share sale prospectus. Photographer: Munshi Ahmed/Bloomberg

Felda Global Ventures Holdings Bhd. raised about 10.4 billion ringgit ($3.3 billion) in this year’s second-biggest initial public offering after Facebook Inc., said three people with knowledge of the matter.

Felda Global, the world’s third-largest operator of palm oil plantations, sold shares to institutional investors at 4.55 ringgit each, said the people, asking not to be identified as the information is confidential. The Kuala Lumpur-based company had marketed the shares at 4 ringgit to 4.65 ringgit. Demand for stock from fund managers exceeded supply by more than 29 times at that price, two people said.

Malaysian IPOs are defying the market turmoil brought on by Europe’s debt crisis, which caused companies to scrap at least $4.2 billion of first-time sales in the past month. Hospital operator IHH Healthcare Bhd. and power company Malakoff Bhd. are pursuing IPOs that may help Kuala Lumpur’s bourse widen its lead in Asian deals this year.

“Felda is in a sweet spot because it is a large offering in a Malaysian context with a very cash-rich base of investors,” Abdul Jalil Abdul Rasheed, who helps manage $3 billion as chief executive officer of Aberdeen Islamic Asset Management Sdn. in Kuala Lumpur., said yesterday. “We see other IPO markets being weak, but Malaysia has pulled through.”

Graff Diamonds Corp. and Formula One are among companies whose plans to go public in Asia were undone in the past month by stock-market volatility. Powerica Ltd., an Indian company backed by Standard Chartered Plc’s private equity unit, shelved plans for an IPO, people familiar with the deal said yesterday.

Same as Sime

The IPO values Felda at 14.2 times estimated full-year earnings, one of the people said. That’s similar to local rival Sime Darby Bhd., the world’s largest palm oil company by acreage. Singapore’s Golden Agri-Resources Ltd. trades at 9.3 times estimated earnings, data compiled by Bloomberg show.

A statement will be made on the pricing in a few days, Felda Global spokeswoman Izan Hussain said by phone yesterday.

Felda Global is selling $1.1 billion of shares to 12 so-called cornerstone investors, including the country’s biggest pension funds, according to a term sheet for the deal. Those buyers have pledge to hold the shares for a minimum 180 days in return for guaranteed allocations, the document showed.

The plantations group manages estates for the Federal Land Development Authority, a Malaysian government agency. It has about 355,864 hectares (878,984 acres) of plantations in Malaysia in addition to land in Indonesia. The company also has palm oil refining businesses in China, Indonesia, Turkey and South Africa, according to its share sale prospectus.

Facebook Falls

The IPO is the Southeast Asian nation’s biggest since Petronas Chemicals Group Bhd. raised a record 12.8 billion ringgit in 2010, according to data compiled by Bloomberg. Facebook, the world’s largest social-networking company, completed a $16 billion IPO last month. Its shares have fallen 28 percent from the offer price.

IHH Healthcare, Asia’s biggest hospital operator controlled by Khazanah Nasional Bhd., secured investors including AIA Group Ltd. this week for a $2 billion IPO in Kuala Lumpur, people familiar with the matter said June 12.

Malakoff, the country’s largest independent power producer, is inviting proposals from banks to raise about $1 billion, two people with knowledge of the matter said yesterday. Billionaire T. Ananda Krishnan is considering a $1.5 billion offering for Malaysian pay-TV broadcaster Astro All Asia Networks Plc later this year, a company official said in March.

Malayan Banking Bhd., CIMB Investment Bank Bhd. and Morgan Stanley are managing Felda Global’s IPO as joint global coordinators, according to the prospectus. JPMorgan Chase & Co. and Deutsche Bank AG are also involved.

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