KUALA LUMPUR: More and bigger initial public offerings (IPOs) are expected this year, compared with last year despite the challenges facing the stock market this year.
New IPOs would be mainly driven by expected higher interest rates and the stock market providing a cheaper option of fundraising for shareholders and companies.
For IPOs approved by Bursa Malaysia and the Securities Commission (SC) last year, the largest was Serba Dinamik Holdings Bhd at RM584 million, which was approved last month but would be listed next month.
According to investment banking sources, there are some high-profile listings in the pipeline for 2017-2019.
It normally takes 1½ to two years from the date a company appoints an investment bank to do the required paperwork for the listing for submission to Bursa and SC and the date the company is finally listed.
One of the largest IPOs expected this year is the listing of MMC Port and Logistic Bhd under the stable of Tan Sri Syed Mokhtar Albukhary and is expected to raise RM3.3 billion in second half of the year.
MMC Ports and Logistics Bhd may group together a huge number of logistics companies under the MMC Corp Bhd Group, which includes Pelabuhan Tanjung Pelepas, Johor Port, Northport Corp Bhd, Senai Airport Terminal Services, Kontena Nasional Bhd and Seaport Worldwide Sdn Bhd, among others.
Another mega IPO expected in second half of the year is of property company EcoWorld International Bhd (EWI), which is likely to be listed in March and is targeted to raise RM2.15 billion.
EWI received the SC’s approval in April last year and is expected to involve an issuance of up to 2.153 billion new RM1 shares in EWI representing 89.7 per cent of its enlarged issued and paid-up share capital.
Conglomerate Sadat Group Bhd is another billion-ringgit IPO that is expected in second half of the year to raise RM2.0 billion.
Another billion-ringgit IPO expected in first quarter is the relisting of QSR Brands Bhd that may raise RM1.8 billion.
A consortium that included private-equity firm CVC Capital Partners was behind the IPO of the operator of KFC and Pizza Hut restaurants in Southeast Asia, said investment banking sources.
The owners of QSR Brands Bhd include CVC and the Employees Provident Fund.
Edra Global Energy Bhd, formerly known as 1MDB Energy Group Bhd, changed its name to Edra Global Energy Bhd in December 2014. It is also expected to be listed this year to pare down its debts and unlock its value. Its new owner, China General Nuclear Power Corp, is set to list Edra Global Energy Bhd in the first quarter to raise around RM1.8 billion.
The other notable listing expected in first half is Iskandar Waterfront Holdings Bhd, owned by Tan Sri Lim Kang Hoo.
A mega listing expected next year is Axiata Group Bhd’s unit, edotco Group Bhd. It is set to be listed in first half of next year and targets to raise RM2.2 billion.
Established in 2012, edotco Group is the first regional and integrated telecommunications infrastructure services company in Asia, providing end-to-end solutions in the tower services sector from tower leasing, co-locations, build-to-suit, energy, transmission and operations and maintenance. With a regional portfolio that includes over 16,000 towers across its core markets, edotco is now the 14th largest tower company in the world.
U-Mobile Bhd, under the stable of businessmen Tan Sri Vincent Tan, is another notable listing expected next year.
Malaysia Airlines Bhd, which was expected to return to the black last year, is likely to be listed in 2019 to ease its debt burdens after being privatised by Khazanah Nasional Berhad in 2014.
Although last year was not a stellar year for IPOs, there are bigger and more IPOs in the pipeline this year.