KUALA LUMPUR: Tycoon Ananda Krishnan's Bumi Armada is raising as much as US$906 million (RM2.77 billion) through an IPO next month, according to a term sheet, in what will be Southeast Asia's second largest stock offering after Hutchinson Port's Singapore listing.
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The oil and gas service provider's IPO will list on the Kuala Lumpur stock exchange despite volatility in financial markets that has canned a number of deals in Singapore and Hong Kong.
The IPO has attracted seven cornerstone investors, including Malaysia's state investment fund Permodalan Nasional Bhd and Prudential Fund Management Bhd, which have pledged to invest about US$309 million (RM945.54 million) into the deal. The term sheet seen by Reuters yesterday showed Bumi Armada set a price range for RM2.80 to RM3.15 per share, raising as much as US$906 million - lower than initial expectations of a US$1 billion fundraising.
This reflects some investor skittishness over increased financial volatility due to the Greek debt crisis and inflationary pressures. Bumi Armada officials could not be reached for comment.
A record US$58 billion worth of IPOs in Asia have been pulled in the first six months by 36 companies, a record and 39 per cent more than a year ago, Thomson Reuters data shows.
"Bumi Armada coming into play will be good for the Malaysian stock market, because we lack these type of headline grabbing IPOs," said Abdul Jalil Rasheed, a Kuala Lumpur-based fund manager at Aberdeen Asset Management.
"Then again, this is a re-listing and we have to wait and see whether this is a company that can bring in the returns because oil and gas sector is very cyclical," he said.
Bumi Armada will be the largest offer in Malaysia since the listing of Petronas Chemicals last year. Bumi Armada is an offshore oil support specialist, and is the only Malaysian company that owns floating production storage and offloading vessels, which carry a premium lease rate. - Reuters
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