Sources: Maxis plans US$2bil public offering
- SINGAPORE/KUALA LUMPUR: Malaysia’s biggest mobile phone operator, Maxis Communications Bhd, plans to raise US$2bil in a public offering later this year, underscoring the revival of Asian initial public offerings (IPOs) as equity markets rebound.
The offering, which could be the biggest in Malaysia since 1995, comes just two years after Maxis was taken private by its reclusive billionaire owner, tycoon Ananda Krishnan, who owns telecom assets in India and Indonesia.
Two sources told Reuters that Maxis had chosen Goldman Sachs, Credit Suisse and CIMB to advise it on a listing in Kuala Lumpur. Under Bursa Malaysia rules, a company needs to sell a minimum 25% stake to list on the stock exchange.
“It will create some sort of excitement because it was the darling of investors then and it had substantial foreign shareholdings too,” Abdul Jalil Rasheed, equities chief at Aberdeen Asset Management’s Malaysia unit said yesterday .
The move comes after Prime Minister Datuk Seri Najib Tun Razak last month asked Maxis to relist on Bursa Malaysia to boost liquidity and draw in investors to South-East Asia’s most laggard stock market so far this year.
Goldman Sachs, Credit Suisse and CIMB declined comment on the share sale plans. The sources declined to be identified because details of the deal are not public.
“There is no announcement at this point. An announcement will be made at the appropriate time,” Catherine Leong, Maxis’ head of public relations, told Reuters when asked for a comment.
IPOs have sprung back to life in booming markets in Asia, led by China after new share offerings ground to a halt last year due to the meltdown in markets.
Some analysts said Maxis could be looking to raise money as it seeks to fund capital expenditure (capex) required by its 74%-owned Indian unit Aircel.
“With such huge capex, perhaps Maxis has found itself geared to the limit and needs to turn to capital markets for funds,” ECM Libra said in a research note.
Maxis said in March it was planning to invest US$5bil over the next three to five years to accelerate Aircel’s cellular coverage expansion in India.
“Now is probably a good time for Maxis to be relisted. With that kind of size, the stock will provide the kind of liquidity investors were looking for,” said Aberdeen’s Rasheed.
The listing would be the biggest since the US$1.1bil listing by Petronas Gas Bhd in Malaysia in 1995.
Krishnan, ranked by Forbes Magazine as Malaysia’s second-richest man at US$7bil, controls 75% of Maxis. The rest is owned by state-owned Saudi Telecom Co Ltd.
Krishnan also owns pay-television operator Astro All Asia Networks plc and Tanjong Plc, a power and gaming group, and satellite operator Measat Global Bhd, through his investment vehicles.
Shares in Astro and Measat have risen 8% and 10% respectively since June 4 when market talk first emerged Maxis will be relisted through one of the companies. — Reuters
Here's a simple issue for investors to consider.
The stock market is a risk, yes? Whenever we invest in a share, the risk is countless. Let's see, we could screw up in our stock selection, the company that we thought was good turns out to be a lemon instead, companies could be hit by misfortunes (some misfortunes could be avoided but some - like economic downturns could not be avoided), we could be fooled by a company's accounting shenanigans, we could over pay for our investments etc etc etc. The risks are simply there. There is no such thing as a risk free investment. Having said that, one can always attempt to minimise our risk when we invest.
Having weigh out our risks, we then take the plunge to invest.
And when we do, isn't it a no brainer that we want to be fully compensated of and when we make our investment?
For example, putting an upside gain capped at 8% versus downside risk of 20% or more, wouldn't make much sense yes?
It's simply not business savy to make such an investment when our upside is capped while our downside risk remains.
Would you not agree?
So when a company has the option to list and delist as per their wimps and fancy, wouldn't this cap our potential gains?
Isn't this the main issue one has to content with Maxis re-listing?
What if Maxis decides to delist again? Not possible? Does a leopard ever loses its spots?
How then?
Would I be happy and excited with Maxis relisting?
No way. My personal flawed view is why bother!!!!
And there are bunch of other implications to consider with this re-listing.
Our market is small and the lack of foreign funds is undeniable. When Maxis relists, many of the local funds would have to readjust their portfolio. Those in telco sector would have to reconsider their selections. (Hello Axiata! Hello DiGi! ) And those that are NOT in, might be forced to re-consider Maxis. So when Maxis relist, guess the implication on other stocks. Would it be good or would it be bad? Would some fund even take the opportunity to sell into strength and wait for this 'new' listing?
How now my dearest?
Read more...
