Malaysian plantation company Felda Global Group has hired bankers for an initial public offering that would raise as much as $2 billion next year, sources with knowledge of the deal said, in the third-largest IPO in the country's history.

The IPO would raise 5 to 6 billion ringgit ($1.6-$1.9 billion), two sources told Reuters , making it the biggest since the $4.1 billion IPO of Petronas Chemicals Group Bhd a year ago.

azlan A source with direct knowledge of the matter told Reuters on Monday that Felda has hired CIMB Investment Bank, Maybank Investment Bank and Morgan Stanley to be joint global co-ordinators, while JPMorgan and Deutsche Bank are joint bookrunners.

Deutsche and Morgan Stanley declined to comment while Maybank IB and CIMB could not provide an immediate comment. JP Morgan could not be reached for comment.

Proceeds from the IPO will go towards expanding its core businesses, Felda Global's managing director Sabri Ahmad told Reuters in a recent interview.

Maxis Bhd's relisting in 2009 is the second-largest IPO in Malaysian corporate history raising $3.3 billion.

Despite choppy economic conditions, Malaysian companies are continuing to proceed with their IPOs.

In addition to Felda Global's listing next year, two other companies - Gas Malaysia Bhd and Pavilion REIT - are pushing ahead their IPOs worth $238.2 million and $222.4 million, respectively.

azlan Felda Global, the business arm of the nation's federal land authority (Felda), is an agri-business company focused on palm oil, rubber and sugar cane processing and cultivation.

The land authority has recently embarked on an exercise to monetise its assets, and listed its sugar unit MSM Malaysia Holdings Bhd in June.

Sabri said that the goal of the listing was to create a multinational firm similar to the likes of US-based Archer-Daniels-Midland Co and Cargill Inc .

Felda Global's proposed IPO courted some political controversy because the land authority is also responsible for the welfare of Felda settlers, ethnic Malaysians who receive aid in the form of land from the government.

Felda's Sabri, however, told Reuters that land set aside for the settlers will not be included in the IPO.

- Reuters