FGV shares will do well

This is written by my colleague Eileen Ng.

KUALA LUMPUR: PRIME Minister Datuk Seri Najib Razak is confident that Felda Global Ventures Holdings Bhd’s (FGV) initial public offering (IPO) will be well received.

Speaking at the launch of the FGV IPO prospectus here yesterday, he said the listing of Felda’s arm was vital as it would reinvigorate the Malaysian capital market and boost the economy.

“We want to create wealth. God willing, I hope it will do better than Facebook,” he said.

The plantation giant’s IPO will be the second largest in the world, so far, this year after the US-based social networking service operator Facebook.

Facebook stock charted a lacklustre performance on its first day of trading on May 18 on New York’s Nasdaq Stock Exchange. 

It fell by more than 26 per cent since then from the US$38 (RM120) per share IPO price.

Najib said some bankers told him that the FGV shares, which are targeted to be listed on Bursa Malaysia on June 28, were being sought after. “So, there could be some disappointed potential investors who want to subscribe to the shares.”

He said signs of strong demand by foreign investors for blue-chip Malaysian companies were seen during his trips to London and New York recently. “The FGV listing proposal has attracted interest from two major commodities companies in Europe — Louis Dreyfus Commodities Asia and Vitol Group.”

Apart from these two strategic investors, according to the prospectus, there are 12 cornerstone investors, including foreign entities, who will pay more than RM3 billion to take up a 19.8 per cent stake in the company.

The prospectus states that 52.5 per cent of FGV is being offered to the public. Institutional investors are expected to pay RM4.65 per share. 

The retail price, after completion of the institutional book building, will be 98 per cent of the institutional price or RM4.55. The public can subscribe to FGV’s shares from 10am yesterday. The offer closes  on June 12 at 5pm.   

Najib also announced that the wives of Felda settlers would receive their RM5,000 windfall on July 7 in conjunction with Settlers Day (Hari Peneroka) as well as the opening of the new Felda building.

Earlier this month, the prime minister announced that 112,635 settler families would be getting a windfall of RM1.689 billion, or RM15,000 for each family.

Under the windfall scheme, each settler has been paid RM5,000, while another RM5,000 would be paid to each settler’s wife. The last portion of RM5,000 would be paid to the second generation of Felda settlers.

Najib assured the settlers that their interests would be looked after. 

He said of the 255.37 million retail shares offered, 182.41 million were allocated for settlers, Felda staff and those who had contributed to the organisation. The balance of 72.96 million shares were for public investment. 

“As such, claims that the government will manipulate the settlers by listing FGV are untrue and baseless. I am honouring my late father’s legacy and I will not allow any harm or difficulties to fall on any Felda member who had all this while sacrificed a lot for the nation,” Najib said.

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