Malaysia's biggest mobile service provider, Maxis Bhd, aims to raise as much as US$3.65 billion (RM12.34 billion) in the country's biggest IPO, despite a cooling off in demand for Asian listings following China's flurry of offerings.
Maxis, which will sell 30 per cent of its existing share capital in the IPO, has set an indicative price range of RM4.80 to RM5.50 a share, according to a term sheet obtained by Reuters yesterday.
The deal comes to market at a time when demand for IPOs has soured slightly.
South Korea's POSCO Engineering & Construction this week cancelled its planned US$926 million offering, citing disappointing bookbuilding.
In Hong Kong, Guangzhou-based developer Evergrande dramatically slashed its fundraising target to just US$828 million from US$2.1 billion.
Maxis' share offer comprises an institutional tranche of 2.037 billion shares, more than 90 per cent of the total and a retail portion of 212.3 million shares. The mobile phone operator kicked off its institutional book-building for the IPO yesterday.
The term sheet showed Maxis will set aside about a third of the offering for cornerstone investors who will be subjected to a six-month lock-up period.
The IPO offers "limited upside" in terms of share price gain, said Kevin Low, analyst at Kuala Lumpur-based Affin Investment Bank.
"Positioned as a matured yield play, we expect an active capital management theme to be the primary investment thesis for the stock," he said.
Malaysia is a fully saturated market in terms of mobile phone penetration. Mobile phone companies in Malaysia are trading at a steep premium to their regional peers.
Fidelity, the world's biggest mutual fund firm, was one of four cornerstone investors who have committed to take up the shares, a source familiar with the matter said yesterday.
Another source directly involved in the deal told Reuters earlier this week the Employees Provident Fund, Malaysia's biggest pension fund, was one of the domestic funds that had agreed to pay a maximum price of RM5.20 a share for the cornerstone tranche.
The listing of Maxis comes just two years after reclusive Malaysian billionaire T. Ananda Krishnan took the company private in a RM40 billion deal.
The re-listing is a stripped-down version because it will house just the Malaysian business, leaving the fast-growing Indian and Indonesian operations with its unlisted parent Maxis Communications Bhd.
Ananda, ranked by Forbes magazine as Malaysia's second-richest man earlier this year, owns a 45 per cent stake in Maxis Communications while Saudi Telecom owns a 25 per cent stake. The rest is held by various domestic funds in Malaysia.
IPO proceeds will be used to reduce Maxis Communications' debt and to meet funding requirements of its investments in India and Indonesia.
Maxis said in its draft prospectus it would pay out 75 per cent of its earnings as dividends.
The listing will "enable the company to access the equity capital market as it pursues growth opportunities". - Reuters
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