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Palm oil refiner Mewah International has priced its US$214 million ($278 million) initial public offering in Singapore below an indicative price range, sources said, as the deal was hurt by the recent selloff in markets.
The palm oil firm’s public offering follows a string of successful IPOs in Singapore, such as the US$3 billion listing of Global Logistic Properties (GLPL.SI) and Mapletree Industrial Trust’s (MAPI.SI) about US$720 million IPO.
The palm oil firm’s public offering follows a string of successful IPOs in Singapore, such as the US$3 billion listing of Global Logistic Properties (GLPL.SI) and Mapletree Industrial Trust’s (MAPI.SI) about US$720 million IPO.
Unlike Mewah, GLP and Mapletree Industrial were priced at the top of their indicative range, a sign that appetite for IPOs may be waning after the two large listings in October.
Mewah International priced its IPO at S$1.10 a share, two sources familiar with the deal said on Monday, against an indicative price range of $1.25-$1.55 each.
Based on this price, Mewah will raise as much as $277 million by selling 251.68 million shares. It also has an option to sell an additional 37.8 million shares if it the greenshoe option is exercised. The sources declined to be named because the final price was not public.
"Investors may just be cautious about the volatility and therefore need some discount to absorb the potential volatility in the market that we may see in the near term," said Ivy Ng, an analyst at CIMB Research.
Singapore stocks <.FTSTI> are down 0.4% on Monday, as sentiment remained weak after the MSCI index of of Asia-Pacific stocks outside Japan <.MIAPJ0000PUS> slid 1.9% on Friday in its the biggest one-day percentage fall since late June.
Ng added that as a palm oil processor, it may be difficult for Mewah to pass on higher raw material prices.
The company said that it is one of the largest edible oils processing firms in Asia with a current total refining capacity of 8,000 tonnes a day or 2.8 million tonnes annually.
Wilmar (WLIL.SI), the world’s biggest listed palm oil firm, and Golden Agri-Resources (GAGR.SI) are among the number of large palm oil firms listed on the Singapore exchange.
The funds raised from Mewah’s IPO will be used to partially finance the projects for new facilities and expansion, its preliminary prospectus said.
Credit Suisse (CSGN.VX) is the sole global coordinator and joint bookrunner with BNP Paribas (BNPP.PA).
Mewah was not available to comment.
