Thursday October 29, 2009
Maxis to raise RM11.7bil via IPO
KUALA LUMPUR: Maxis Bhd is offering for sale 2.25 billion shares, or 30% of its total equity, to new investors with an indicative offer price of RM5.20 per share.
This means the initial public offering (IPO) will raise at least RM11.7bil for the major shareholders of the company, that is, Malaysian tycoon T. Ananda Krishnan and Saudi Telecom.
The final price of the shares on offer, however, will only be determined on Nov 10 after the completion of its institutional book-building exercise.
The final price could be at a discount of around 5% from the indicative offer price.
“It was envisaged that the re-listing of Maxis would attract the attention of local and regional investors, enlarge Bursa Malaysia’s capitalisation and also add to the range of large, well-managed companies available on our stock market,” Maxis chairman Raja Tan Sri Arshad Raja Tun Uda said yesterday at the launch of the company’s prospectus.
With a market capitalisation of RM39bil when the shares begin to trade on the main market on Nov 19, Maxis would reclaim its position as one of the largest component stocks on the benchmark FTSE Bursa Malaysia KL Composite Index.
According to Datuk Seri Nazir Razak, group chief executive of CIMB Group, which is the adviser for the Maxis IPO, the exercise is the largest-ever IPO in South-east Asia and the largest in Asia Pacific this year.
Nazir said he expected Maxis’ listing to grab the attention of international investors to the local stock market, with the seductive factors being the company’s large capitalisation, solid fundamentals, good track record, healthy growth prospects and strong liquidity.
“Maxis generates steady cash flow from its mobile communications operations, and enjoys strong upside potential for its broadband and data services,” he said.
Maxis currently commands about 40% of the domestic mobile telecommunications market.
While the mobile penetration rate in Malaysia has already exceeded 104%, based on the Malaysian Communications and Multimedia Commission’s latest statistics, Maxis chief executive officer Sandip Das believes there is still ample room for growth.
“People say the mobile market is saturated, but I disagree. The mobile market in Malaysia is mature, but it is not saturated,” he said, adding that east Malaysia was still “under-served” as penetration rates there were less than 40%.
As for the other two pillars of growth, Maxis has allocated a capital spending of RM1.3bil to boost its broadband and data services capacity this year.
Thus far, Maxis has already secured four cornerstone investors that have committed to subscribe about 28% of the Maxis shares on offer, and to hold on to their equities respectively for up to at least six months. These include local fund managers Permodalan Nasional Bhd and Employees Provident Fund and US-based Fidelity Investments.
Of the total shares on offer, only 2.83% will be allocated for retail investors while the remainder 27.17% will be for institutional investors. In its prospectus, Maxis disclosed an aggressive dividend policy that targets a payout ratio of at least 75% of its net profit as dividends.
“The growth prospects and strong cash flows generated by Maxis will ensure that the company is an attractive investment on Bursa Malaysia for the global and domestic investor community,” Raja Tan Sri Arshad said.