By Shannon Teoh
KUALA LUMPUR, June 21 — The government has dismissed Louis Dreyfus Commodities Asia’s withdrawal from FELDA Global Ventures Holdings’ (FGVH) listing next week, saying the offering was already 44 times oversubscribed.
The deputy minister in charge of the federal land development scheme, Datuk Ahmad Maslan (picture), also told Parliament today the French giant would likely still be involved but with a smaller stake in the world’s third largest palm oil firm than the proposed 2.5 per cent.
“It poses no problem to the FELDA IPO as it is already 44 times oversubscribed. No problem, there are many more investors ready,” the deputy minister in the Prime Minister’s Department said.
The Pontian MP also denied that Louis Dreyfus was ditching FGVH entirely as talks were still ongoing with the French agri-business company likely to make an investment of “lower value.”
The Edge Financial Daily reported today other investors have leapt at the chance to snag Louis Dreyfus’ 2.5 per cent stake a week ahead of its market debut.
The local business daily also reported the company was still keen to take a smaller stake despite missing the June 13 deadline to confirm its institutional offering.
Citing a business executive familiar with Malaysia’s biggest initial public offering (IPO) this year, the paper reported that the reason Louis Dreyfus had hesitated was because the French company and FGVH had yet to agree on the terms for the supply of crude palm oil.
Reuters had also reported FGVH president Datuk Sabri Ahmad saying yesterday: “Talks on strategic venture partnership between FELDA Global and Louis Dreyfus are ongoing.”
The world’s largest IPO this year after Facebook had attracted a strong cast of more than 10 cornerstone investors, including foreign firms AIA Group, Hong Kong’s Value Partners, Fidelity Investments and Middle Eastern sovereign fund Qatar Holding LLC.
According to The Edge, Louis Dreyfus’ withdrawal happened at a time when foreign investors were unhappy with the paltry 10 per cent shares allocated for non-local funds in the listing which is set to raise RM10.5 billion.
However, Reuters reported that market observers believe the Paris-based company’s action was unlikely to affect FGVH’s debut as its institutional offer of 1.92 billion shares has been oversubscribed.
Malaysian companies making their market debut have largely outshone those of most other Asian countries this year due to the dominant role of local investors who have shielded it from the global shake-up.
The planned June 28 listing will create the world’s third-largest palm oil operator with a market capitalisation of RM16.6 billion.