UPDATE 1-Bumitama Agri to raise up to $194 mln in Singapore IPO

Tue Apr 3, 2012 4:30am EDT

(Adds comments from banker, background)

By Charmian Kok

SINGAPORE, April 3 (Reuters) - Indonesian palm oil firm Bumitama Agri Ltd's planned S$244 million ($194 million) initial public offering in Singapore has attracted strong demand from funds and wealthy investors looking to tap into the region's booming resources sector.

Bumitama's offering is the latest in a string of IPOs returning to the Singapore market this year as Asian shares have rallied on signs of an improving global economy.

The placement was 31 times subscribed, the highest oversubscription rate for a corporate offer since Yangzijiang Shipbuilding (Holdings) Ltd's IPO in 2007, said Matthew Song, HSBC's head of equity capital markets, Southeast Asia.

HSBC, along with DBS, are the joint issue managers, bookrunners and underwriters of the IPO.

"(The IPO) attracted more than 150 investors but the majority are long-only funds. There's huge demand from high net worth individuals and family offices as well," Song told Reuters.

Bumitama said in a prospectus it plans to sell 327.4 million shares, including an over-allotment option, at S$0.745 each - the top of an indicative price range of S$0.675 to S$0.745.

When it lists on April 12, Bumitama will join other palm oil firms listed in Singapore, including Wilmar International Ltd and Golden Agri Resources Ltd.

Bumitama has one of the youngest palm oil plantations in Asia and owns 190,000 hectares of land, of which only 100,000 have been planted with palm oil, leaving room for more growth, Song said.

"It is one of the most upstream producers, meaning they are very dependent on CPO (crude palm oil) pricing, which many investors have a long-term positive outlook on," said Song.

The palm oil firm said a total of 124.8 million shares were placed to cornerstone investors, including Hwang Investment Management Bhd, UOB Asset Management Ltd and Wii Pte Ltd, a wholly owned subsidiary of Wilmar International Ltd.

Malaysia's IOI Corporation, now a controlling shareholder of Bumitama, will own 30 percent of the Indonesian firm after the IPO. ($1 = 1.2574 Singapore dollars) (Reporting by Charmian Kok; Editing by Anshuman Daga)

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