MALAYSIA’S BIGGEST IPO THIS YEAR: Retail price set at an indicative RM2.80 per share
UMW Oil & Gas Corp Bhd's listing is estimated to raise RM2.36 billion, making it Malaysia's largest initial public offering (IPO) so far this year.
UMW Oil & Gas yesterday set its retail price at an indicative RM2.80 per share, valuing it at RM6.05 billion from an IPO of 843.18 million shares.
Its listing on Bursa Malaysia's Main Market has been scheduled for November 1, company officials said at the launch of its prospectus, here. The final pricing is expected to be fixed on October 17.
UMW Oil & Gas' 843.18 million IPO shares are made up of a public issue of 611.8 million new shares and an offer for sale of 231.38 million shares by its parent UMW Holdings Bhd.
The company has set aside 648.6 million shares for institutional offering and the remaining chunk of 194.58 million shares are for retail investors.
Of the total RM2.36 billion proceeds, RM647.9 million will be pocketed by UMW Holdings.
The balance of RM1.71 billion raised from the public issue will go to UMW Oil & Gas, which will use it as capital expenditure (capex) and debt repayment.
"We need high capex from time to time and, thus, we do not have any fixed dividend policy," said its president Rohaizad Darus.
He said 60 per cent of the RM1.7 billion, or RM1.01 billion, will be spent on acquisition and maintenance of drilling rigs and hydraulic workover unit.
The company has one semi-submersible and three premium jack-up drilling rigs. It expects to take delivery of a US$223 million (RM712.8 million) new jack-up rig in May next year.
Drilling business contributed to 93 per cent of UMW Oil & Gas' total revenue last year.
The company has also set aside RM597.4 million (35 per cent) for repayment to UMW Holdings, following an internal reorganisation. Post-listing, UMW Holdings' stake in UMW Oil & Gas will shrink to 55.15 per cent from 100 per cent.
A total of 21 cornerstone investors, the bulk (90 per cent) of whom are locals, will take up the institutional tranche.
Some big names include the Employees Provident Fund, Permodalan Nasional Bhd and Fullerton Fund Management.
Maybank Investment Bank Bhd and CIMB Investment Bank Bhd are the principal advisers of the IPO.