Asia’s third largest IPO on way

Asia’s third largest IPO on way

KUALA LUMPUR - Agence France-Presse
Asia’s third largest IPO on way

Malaysia’s Prime Minister Najib Razak (R) holds the initial prospectus while Chairman of Integrated Healthcare Holding Berhad (IHH) Abu Bakar Suleiman (L) smiles. AFP photo

Malaysia’s IHH Healthcare said yesterday it plans to raise more than $2.0 billion from an IPO in Kuala Lumpur and Singapore this month, in the world’s third-biggest stock market flotation this year. IHH has ventures in several countries including Malaysia, Singapore and Turkey.

The IPO (initial public offering) from Asia’s largest hospital operator, with a target date of July 25, means Malaysian companies will have had two of the biggest public offerings this year.

Oil palm plantation giant Felda Global Ventures’ stock market launch last week raised $3.25 billion and was the second biggest of 2012 after Facebook’s disastrous debut, and came after several flotations were delayed in Asia amid deteriorating global conditions.

In its prospectus unveiled yesterday, IHH Healthcare said it plans to raise 6.37 billion ringgit ($2.01 billion) by offering 2.23 billion shares on the Kuala Lumpur and Singapore stock exchanges, including 1.80 billion new shares.

An initial indicative price for each share is set at 2.85 ringgit or 1.18 Singapore dollars. The firm, majority-owned by Malaysian sovereign wealth fund Khazanah Nasional, said it would determine the final stock price on July 12.

The listing could see IHH valued as the second largest listed private hospital operator in the world, Malaysian Prime Minister Najib Razak said at the launch, with an expected market capitalization of 23 billion ringgit.

It is the first concurrent offering across two Southeast Asian stock exchanges, with 209 million shares earmarked for the Malaysia public offering and 141 million for Singapore.

Twenty-two so-called cornerstone investors, including international fund managers, have already committed to buying more than 60 percent of the stock, while the rest are for institutional placement.
Najib said the listing marked “very significant progress” in the country’s plans to divest government-linked companies.

“Our explicit strategy and objective is to support Malaysian businesses to become regional and global companies -- and with this listing IHH can further cement its role as a leading force in the global healthcare sector,” he said.

Nazir Razak, chief executive of financial firm CIMB Group -- and the prime minister’s brother -- said Malaysia looked set to be Asia’s top IPO market for 2012. CIMB is the principal adviser and lead underwriter for the listing. “Malaysia is almost like an oasis of IPOs... We go into the deal with good momentum (supported by cornerstone investors),” he told reporters.

On its debut on the Kuala Lumpur exchange, Felda Global’s shares jumped nearly 20 percent to open at 5.39 ringgit ($1.69), defying global economic uncertainly and proving a contrast to Facebook’s debut.

Other Asian IPO’s face delays due to economy

The volatile economic environment has forced the delay of other major IPOs in Asia, including a planned $2.5 billion Formula One listing in Singapore. IHH plans to use 90 percent of the gross proceeds from the exercise to repay borrowings in the next year.