KUALA LUMPUR: Malakoff Corp Bhd, the power arm of MMC Corp Bhd, is likely to price its initial public offering (IPO) at its illustrative retail price of RM1.80 per share based on interest garnered from investors to date, said MMC group managing director Datuk Seri Che Khalib Mohamad Noh.
“The IPO is not overpriced. I think RM1.80 is a very good price. So far the indication of interest has been quite good,” he told reporters on the sidelines of MMC’s (fundamental: 1; valuation: 1.8) extraordinary general meeting yesterday.
According to its circular to shareholders, Malakoff is expected to have a market capitalisation of RM9 billion post-IPO based on an illustrative retail price of RM1.80 per share.
Earlier at the meeting, MMC shareholders unanimously approved Malakoff’s listing on Bursa Malaysia’s Main Market. Malakoff is proposing an IPO of 1.52 billion shares of 10 sen each, comprising an offer for sale of up to 521.74 million existing shares and a public issue of one billion new shares.
Che Khalib said the group will be looking at making asset acquisitions once the IPO is completed, and the listing is expected to take place in the middle of May this year.
“This is the reason [why] we are seeking a listing for Malakoff. We believe that we already have the size now and this will also allow us to expand further in terms of Malakoff’s business,” he said.
“With Malakoff being the largest independent power producer in the region, we are positioned to spread our wings further and this listing will allow us to raise money for our future expansion,” he said.
Che Khalib declined to comment on MMC’s appointment as the project delivery partner for the Klang Valley Mass Rapid Transit’s Line 2 and being shortlisted for the Light Rail Transit 3 project.
In a note yesterday, UOB KayHian Research maintained a “buy” call and a target price of RM3, saying that Malakoff’s listing was highly positive for MMC as it would “crystallise Malakoff’s market value on Bursa”.
Malakoff, which was delisted in 2007 for RM9.3 billion, is 51% controlled by MMC, which has a 28.8% direct stake in the independent power producer and the remaining 22.2% through its wholly-owned subsidiary Anglo Oriental (Annuities) Sdn Bhd. Post-listing, MMC’s effective stake would drop to 37.8%.
Among other substantial shareholders are the Employees Provident Fund, Kumpulan Wang Persaraan (Diperbadankan), Seasaf Power Sdn Bhd and Standard Chartered IL&FS Asia Infrastructure Growth Fund.
MMC shares closed unchanged at RM2.49 yesterday, with a market capitalisation of RM7.52 billion.
This article first appeared in The Edge Financial Daily, on March 31, 2015.