Business

Thursday October 8, 2009

STC looks forward to Maxis IPO

By LEONG HUNG YEE


Saudi Telecom sees it as the ‘crowning’ of its investment

PETALING JAYA: The initial public offering of Maxis Bhd is the “crowning” of Saudi Telecom Co’s investment in the Malaysian telecommunications company, said STC chairman Muhammad Al-Jasser.

“We (have) learnt a lot together and enhanced the businesses. This is really the crowning of the experience – by IPO-ing the company and letting people vote with their ringgits, if you will, for the joint venture between Saudi Telecom and Maxis.

“It should give our shareholders, who are very demanding, a feel for what we’ve been doing ...,” said Muhammad in an interview with CNBC in Istanbul yesterday. Muhammad is also Saudi’s central bank governor.

Two years ago and a day after Maxis Communications Bhd was delisted from the stock exchange following a major privatisation exercise, STC, Saudi Arabia’s largest phone company, forked out US$3.1bil for a 25% stake in Binariang GSM Sdn Bhd and a 51% stake in Maxis’ Indonesian operations. Tycoon T. Ananda Krishan controls the remaining stake in Binariang, the parent company of Maxis Communications Bhd.

“It was a wonderful investment for Saudi Telecom ... it was our first foray into international markets and it’s proved to be a very good one,” said Muhammad.

He said the company also has investments in Turkey through Turk Telecom as well as in India, South Africa, Kuwait and Bahrain.

“We are continuing to find investments that are very consistent with our strategy, with good synergies with our home market in Saudi Arabia. Malaysia and Maxis are a good example. Usually, we like to grow the business enough for the interested parties to find greater value than when we took it in,” he said.

Three weeks ago, Maxis lodged its draft prospectus which will be open for public feedback until Oct 12. It is offering for sale 2.25 billion shares or 30% of its existing issued and paid up capital in an exercise that is estimated to raise some US$3bil, making it the largest IPO in the country.

On the price STC was hoping to fetch from the IPO and whether the advisers have provided any estimates, Muhammad replied: “Yes, but I’m not going to talk about it. But I tell you, they’re giving me wonderful information.”

Meanwhile, Reuters reported that RHB Investment Bank was confident of securing a major role in the planned IPO of Maxis Bhd. “It will be a meaningful role,” said Rafidz Rasiddi, head of RHB’s investment banking division, adding that the mandate would be given soon.

UBS, JPMorgan and Nomura have been hired as co-bookrunners for the IPO and joined Goldman Sachs, CIMB and Credit Suisse, which were earlier appointed as joint bookrunners and global coordinators for the share offer. Maxis’ listing, which will house the Malaysian mobile business, is likely to take place next month.

Turning to deal flows in Malaysia, Rafidz said M&A and fund-raising activities would pick up significantly in the first half of next year. “Our clients are looking to next year. With Maxis done and dusted, you should see a lot more activities in 2010,” he said.

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