IPO   

First Resources

In these market conditions, IPOs with a good parent, good yield, good outlook have been not performing well upon listing,

How do you think this one will fare..

 

178investors, I think First Resources will debut at a slight premium. It's the smallest of all the palm oil players on SGX. Demand for CPO is greater than supply.

Indonesian palm oil plantation and mill owner First Resources yesterday launched its IPO of 225 million shares at $1.10 per unit. The issue comprises 3 million public-offer shares and 222 million placement shares. Of the 225 million shares, 175 million are new shares and 50 million vendor shares. The offer closes on Dec 6.

The firm owns 13 palm oil plantations in Riau province, Sumatra, with total acreage of over 180,000 hectares, as well as 6 palm oil mills, with annual output capacity of about 400,000 tonnes of CPO and 90,000 tonnes of palm kernel.With over 58,000 ha of mature and nearly 22,400 ha of immature oil palm trees under cultivation, over half of First Resources' landbank is still unplanted, and existing trees are on average 7.8 years old.

It plans to plant an additional 10,000 to 20,000 ha of seeds every year, to utilise its remaining land. First Resources is also building a biodiesel plant,expected to be ready by 2Q08, to produce up to 250,000 tonnes of palm-oil based biodiesel annually. It will spend $89.5 million of the expected IPO net proceeds of $185.3 million on new planting, extra mill capacity and the biodiesel plant.

 

any overcapacity issues for CPO?

 

CPO, a hot biofuel play. How does First Resources fare (valuation wise) in comparison to Golden Agri, Synergy Drive, Sime Darby, and Wilmar?

 

zhuge, what's your take on this one? indonesia premium or discount on debut?

 

Indonesian palm oil producer First Resources priced its IPO at the bottom of the indicative price range on Mon, reflecting diminished investor appetite for new share issues.

First Resources said in a prospectus it would sell 225 million shares at $1.10 each, raising $247.5 million. The company had hoped to sell its shares for as much as $1.30 apiece.

The Indonesian company's decision comes after Hyflux Water Trust closed 9% lower on its debut. Several other recent IPOs have floundered on their first day of trading, while at least 2 listings and 1 secondary share sale have been postponed due to jittery markets.

Trading in First Resources, which earned net profit of US$24 million on sales of US$84 million in the first 6 months of '07, will begin on Dec 10.

Citigroup is the issue manager and underwriter for the First Resources IPO.

 

First Resources Ltd, an Indonesian producer of CPO, plans to raise between US$150 million and US$200 million in an IPO in Nov, a source familiar with the deal said on Thu.

Pre-marketing for the IPO is set to begin next week, with a road show scheduled for Nov 1-Nov 15 and a trading debut on Nov 22, the source said. Citigroup is handling the deal.