UMW Oil & Gas Corp IPO: Retail investors squeezed IPO~RM2.80 (kinibiz ,3/10/2013) Just 5% of the shares on offer will be held by the Malaysian general public come that day. UMW O&G, the oil & gas unit of conglomerate UMW Holdings today launched the retail offering for the upcoming initial public offering (IPO) worth at least RM2.36 billion. A total of 843.18 million shares are on offer (IPO shares), representing up to 39% of the enlarged issued and paid up share capital of UMW O&G. The institutional offering accounts for 648.6 million shares or 77% of the IPO shares, split 54:46 between bumiputera investors and non-bumiputera or foreign investors. Seventeen cornerstone investors were announced during the well-attended launch. The bulk of the cornerstone investors were asset management arms of major banks; CIMB, Hong Leong and AmBank; or investment funds; Tabung Haji, Nomura, Permodalan Nasional Berhad (PNB), Employees Provident Fund (EPF), Hwang-DBS, Fullerton and GuoLine. According to the IPO prospectus, cornerstone investors have collectively agreed to acquire 399 million IPO shares equating to close to half of the IPO shares or 18.5% of the enlarged issued and paid up share capital. Two individuals were also listed as cornerstone investors. They are the founders of RHB Bank, Abdul Rashid Hussain and Chua Ma Yu. Meanwhile, the retail offering consists of 194.58 million shares or the remaining 23% of IPO shares. The lion’s share, over three-quarters of the retail offering is reserved for directors, employees or shareholders of the UMW Holdings group of companies. The remaining part of the retail offering, a mere 43.24 million shares or 5% of IPO shares, are open for allocation via balloting to the general public at an indicative IPO retail price of RM2.80 per share. Referring to similar IPO’s with slim retail offerings, Minority Shareholder Watchdog Group CEO Rita Benoy Bushon said the strong presence of cornerstone investors in an IPO can guard against weaker regional sentiment for riskier assets such as shares. She added, despite this “retail investors ought to be given an opportunity to participate in these issuances.” Post-IPO, UMW O&G is expected to have a market capitalisation of just over RM6 billion but will remain 55% owned by its parent UMW Holdings, itself a component stock of the FMB KLCI. UMW O&G plans to spend the proceeds of the IPO on capital expenditure up to RM1.1 billion. For debt repayment, the company has earmarked a portion of the IPO proceeds totalling RM597 million. During the launch of the prospectus today, both Asmat and Rohaizad expressed their gratitude to their largest client by far, state-owned oil & gas giant, Petronas. “We thank Petronas for their unwavering support… without which, we would not be here today,” said Asmat in his opening speech. Three out of four of UMW O&G’s offshore jack-up drilling rigs have been contracted out to Petronas Carigali Sdn Bhd. Significant considering a 90% share of revenue contribution for UMW O&G comes from its drilling activities. The retail offering for UMW O&G’s IPO runs from today to Oct 14 while the institutional offering closes two days later on Oct 17, also the price determination date. Listing on Bursa Malaysia and the first day of trade will take place on Nov 1.
Posted on: Thu, 03 Oct 2013 15:27:00 +0000
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