Weak demand cuts Bumi Armada deal as Ananda holds
UPDATED @ 06:11:29 PM 27-04-2012
KUALA LUMPUR, April 27 — Offshore oilfield services firm Bumi Armada’s block sale of shares was slashed in size today as investors balked at the offering and tycoon T. Ananda Krishnan opted not to sell his holdings.
Weak demand meant the offering priced at the bottom of the RM3.95-RM4.09 range, and only 293 of an initially targeted 440 million shares were sold. Total proceeds were US$377.8 million (RM1.1billion).
According to sources familiar with the deal, investors were spooked by the size of the original offering, which at US$825 million block was almost as big as the company’s IPO last year — and the largest block trade in Malaysia since at least 2008.
Investors appeared to be more comfortable with a smaller sale of Bumi Armada, whose market worth is US$4 billion.
Four stake holding companies sold shares in the block sale. Ananda Krishnan’s Objecktif Bersatu, which was named as a seller on the original term sheet, decided not to sell at that price. The term sheet does not list the buyers of the block.
The revised deal size is equal to a 10 per cent stake in the company, taking the free float to around 40 per cent. While the offering was structured as a 144a deal to attract foreign investors, IFR reported that most of the shares sold ended up in local hands.
Ananda, Malaysia’s second richest man, is engaged in a mass sell-off of assets. News on March 29 of a possible IPO of Astro All Asia Networks followed on the heels of a US$2.8 billion sale of his power assets and proposal to hive off a stake in his satellite operator Measat Global.
Lack of investor demand was among the reasons why Ananda opted out of the Bumi Armada block sale, sources said.
Bumi Armada shares fell 4.7 per cent today to RM4.02. A call to a company spokeswoman was not immediately returned.
RBS was named sub placement agent on the offering, which IFR said may be one of the few equity deals remaining in Asia that will have the RBS name on it. CIMB earlier this month agreed to buy most of the Asian equities business of RBS.
Capital markets activity in Malaysia has seen an uptick this year, after Kuala Lampur saw the launch of several successful IPOs in 2011.
State investor Khazanah Nasional Bhd is expected to list its healthcare assets in Kuala Lumpur and Singapore in the second half of this year, a deal that could fetch US$1.5 billion.
The dual listing could be the fourth-biggest initial public offering in the city state’s history and Malaysia’s second-largest this year after the planned listing of plantation group Felda Global Venture Holdings.
Berjaya Group founder Vincent Tan plans to list 7-Eleven Malaysia Bhd and its Money Online (MOL) Internet business next year in a move that will raise more than 600 million ringgit (US$199 million) combined, local media have reported.
The listings of 7-Eleven and MOL are part of the billionaire’s pledge to donate half his wealth to charity and to reduce group borrowings,
Malaysia-based long-haul budget carrier AirAsia X is planning to list in the second half of this year, according to news reports.
The country’s IPOs last year were among the best performing in Asia. Among the big IPO gainers in Asia in 2011 were sugar refiner MSM Malaysia Holdings, which raised US$270 million in June, and Bumi Armada. — Reuters