Palm Oil Support Service Provider Ecoscience Will Raise Close to RM24 Mil in Its IPO


Ecoscience constructs palm oil mills and plantation facilities. (Bernama pic)

Ecoscience International Berhad (Ecoscience) aims to raise RM24.7 million from its initial public offering (IPO) to strengthen its market position in capturing the growing demand for palm oil amid global economic uncertainty.


At an issue price of 30 sen per share and an enlarged share capital of 340 million shares upon listing, Ecoscience will have a market capitalization of RM102 million.


The company’s IPO offering of 112.2 million issue shares, represents 33% of the enlarged share capital, which comprises a public issuance of 82.2 million new shares and an offer for sale of 30 million existing shares. The company is scheduled to be listed on 18 July.


The one-stop solution provider and turnkey contractor for the construction of palm oil mills and plantation facilities launched its prospectus in conjunction with its IPO on the ACE Market of Bursa Malaysia.


Group managing director Wong Choi Ong said that as a supporting service provider to the palm oil industry, generally considered to be a resilient sector, Ecoscience has benefitted and grown over the past 18 years.


“The future of the industry continues to be positive based on the global consumption of crude palm oil (CPO) which grew at a compound annual growth rate (CAGR) of 2.5% between 2018 and 2020,” he said.


The company noted that proceeds from the IPO will be utilized to expand its palm oil operations abroad and scale up its energy efficiency business.


A total of RM5 million, or 20% of the IPO proceeds, will be allocated for the incorporation of a wholly-owned subsidiary in Indonesia and the establishment of a new fabrication facility and office located at Balikpapan in East Kalimantan province.


“The said expansion will hasten market response time and reduce our shipping costs. The fabrication facility will enhance the group’s prospects of securing new contracts for the expansion or development of palm oil plants and facilities or other related sectors there,” explained Wong.


The company intends to recommend the distribution of at least 20% of its net earnings as dividends to shareholders.


Source: www.freemalaysiatoday.com