Boustead Plantations debuts with mild premium

This is written by my colleague Zaidi Isham Ismail.

KUALA LUMPUR: Boustead Plantations Bhd opened at RM1.66, or 4 per cent premium above its offer price of RM1.60 when it made its debut on the Main Market of Bursa Malaysia yesterday.

Boustead Plantations vice-chairman Tan Sri Lodin Wok Kamaruddin said the group is poised for a bright outlook on aggressive expansion drive.

“As we move forward, we are implementing a three-pronged strategy, namely expansion via land acquisition, continuous improvement in best practices and dedicated research and development efforts.

“Over the next five years, we plan to increase our total planted area by 20,000ha from 70,991.2ha and acquire existing plantation estates and plantations reserve land, primarily in Malaysia,” said Lodin.

He said the company is open to re-entering Indonesia's oil palm plantations again. 

Lodin said RM420 million of the gross proceeds from the initial public offering (IPO) will be used to part-finance the acquisition of 10,000ha of plantation land within the next three years.

The IPO is said to raise RM928 million from a public issue.

Another RM96 million will be used for replanting old trees with higher yielding seedlings, RM390 million to repay parent Boustead Holdings Bhd and RM22 million will be used for estimated fees and expenses for the IPO.

Lodin said Boustead Plantations intends to have a dividend policy of returning at least 60 per cent of profits to shareholders.