By BRIAN GOMEZ
NEW Britain Palm Oil has successfully made a share placement in London that raised K509.7 million (88.9 million pounds), valuing the overall company at K2.08 billion (362 million pounds).
NBPOL, which listed on the Port Moresby Stock Exchange in 1999, will be the first Papua New Guinean company to be listed on the London Stock Exchange’s main market with trading in the stock scheduled to begin next Monday.
Funds from the placement of 25 million new shares at a price of 250 pence per share (K14.30) will be used to double the 40,000 hectares of planted oil palm plantations in a period of seven to eight years, NBPOL said.
Its announcement said NBPOL was the largest palm oil producer in Australasia. Besides its plantations, it operated five oil mills, a refinery and a seed production and plant breeding facility.
The placement, which will go to institutional investors, was fully underwritten by Kaupthing Singer & Friedlander Capital Markets.
NBPOL’s operations are located in PNG and neighbouring Solomon Islands.
The company had been unsuccessful in listing on the Australian Stock Exchange in the late 1990s due to political turmoil under former prime minister, the late Sir Bill Skate.
NBPOL’s chief executive, Nick Thompson, said the successful London IPO was “another important milestone for the company” and would signal the start of the next major phase of development.
He said besides expanding its plantation acreage the company would expand its milling facilities and infrastructure, accelerate the planting programme for existing plantations and further improve its operating efficiencies.
“We believe that our long trading history, scale, market position and long established relationships with our customers, mean we are very well positioned to capitalise on the positive trends we see in the palm oil market.
“Of particular importance for our business is our focus on sustainability as we believe high quality sustainability credentials are increasingly demanded by our European Union customer base.
“The directors believe that our historic and continuing focus on sustainability is beginning to differentiate our product, a trend we believe will continue and grow.”
Helgi Bergs of Kaupthing Singer & Friedlander said his company was delighted with NBPOL’s success especially in view of the difficult current markets.
NBPOL estimated that its average cost of production last year amounted to about US$262 (K767.20) a tonne of crude palm oil, compared with a spot price in Rotterdam of US$930 (K2,723) a tonne.
In the last five years palm oil has become increasingly popular for production of “biofuel” in the face of soaring crude oil costs.