Malaysian plantation giant Felda could raise US$3 billion in what would be Asia's biggest IPO of this year, according to a prospectus unveiled Thursday by Prime Minister Najib Razak.

The targeted June 28 listing of Felda Global Ventures will be the biggest worldwide this year after Facebook's mammoth US$16 billion issue earlier in May, and is being pitched by Najib as a boon to the rural voters he is courting in upcoming elections.

Felda Global Ventures Holding (FGV), the world's third-largest oil palm plantations operator, is an arm of the Federal Land Development Authority (Felda), a government agency that provides land to rural poor.

FGV said it would offer up to 2.19 billion ordinary shares, aiming to raise some 9.96 billion ringgit (US$3.15 billion) at a target price of 4.55 ringgit.

Najib had announced plans in October to float FGV in a bid to turn it into a global commodities player by expanding into palm oil processing and other downstream businesses, part of a larger push to divest state-run firms.

"The listing will fulfill the demands (of Felda settlers) that Felda be developed... It is a big transformation," Najib said when launching the prospectus at a ceremony in the capital Kuala Lumpur.

"We want to create wealth."

Najib drew laughter from those in attendance at Felda headquarters in the capital Kuala Lumpur by saying "God willing, it will do better than Facebook."

He was referring to the disastrous May 18 listing of the social networking leader, which has seen its shares tumble by more than 26 percent from the US$38 per share initial public offering price.

Felda, the government agency, is the world's biggest plantation entity at 850,000 hectares (2.1 million acres).

Besides an oil-palm replanting programme, the proceeds from the listing will be used for potential land acquisitions in Southeast Asia and Africa for cultivation of oil palm and rubber, FGV said in a press release.

Najib announced earlier this month that, as part of the listing plan, each of the more than 112,000 Felda families would receive 15,000 ringgit.

But vocal farmers and the political opposition have warned smallholders who have tilled Felda-granted plots for decades could be exposed to more risk under the complicated scheme.

FGV president and chief operating officer Sabri Ahmad said at the launch that he was confident of successfully transforming Felda.

"There have been many challenges in the process of listing FGV but together we have overcome these obstacles and we now stand at the threshold of something new and exciting," he said.

Najib must call fresh elections by early next year, and the rural Malay vote personified by Felda settlers is seen as critical. His ruling National Front coalition suffered unprecedented losses in the last election in 2008.

Najib has been extending a range of sweeteners to various constituencies recently, ranging from the Felda payout to raises for civil servants.

channelnewsasia.com