KUALA LUMPUR: Bumi Armada Bhd, a company controlled by billionaire T. Ananda Krishnan, raised RM2.66bil after pricing shares at the upper half of its indicative range in Malaysia's biggest initial public offering this year, two people familiar with the matter said.
The oil and gas services company sold shares at RM3.03 each, said the people who asked not to be named as the information is still private.
The offering comes as Sun Art Retail Group Ltd, China's top hypermarket operator, bucked a recent slump in demand for new equity in Hong Kong to raise US$1.1bil after selling shares at the top end of a range.
At least seven IPOs have been cancelled or postponed in Hong Kong this year, and several large issuers including Samsonite International SA have had to accept prices below the maximum they sought.
“At RM3.03, Bumi Armada is leaving quite a lot on the table, probably to attract long-term investors given the current lukewarm response to recent IPOs such as Samsonite,” said Bharat Joshi, who helps to manage about US$5bil at Aberdeen Asset Management.
Aberdeen didn't subscribe to Bumi Armada IPO shares.
Bumi Armada's shares were priced at 19 times 2010 earnings, according to data compiled by Bloomberg. Oil and gas equipment and service providers from emerging Asia-Pacific nations trade at about 27 times the last twelve month's earnings, Bloomberg data show.
Great Eastern Life Assurance (Malaysia) Bhd and Prudential Fund Management Bhd were among so-called cornerstone investors who would buy a combined 10.2% of the shares, Bumi Armada said on June 30.
The company declined to comment in an e-mailed reply yesterday. The IPO is the largest since Petronas Chemicals Group Bhd raised a record RM12.8bil in November.
Eleven of the 18 companies debuting in Malaysia this year have advanced from their offer price, data compiled by Bloomberg show. MSM Malaysia Holdings Bhd , which bought billionaire Tan Sri Robert Kuok's sugar refining business two years ago, also sold shares at the top of its range in June.
Krishnan, Malaysia's second-richest person after Kuok, has a history of delisting and relisting companies. He privatised cell-phone carrier Maxis Communications Bhd in 2007 and took it public again as Maxis Bhd in 2009 without its international operations.
He has since delisted pay-TV broadcaster Astro All Asia Networks Plc, satellite operator Measat Global Bhd, and power and gaming group Tanjong Plc.
Bumi Armada's profit in 2010 rose 26% from a year earlier to RM350.8mil ringgit, or 16.02 sen a share, according to the company's draft prospectus. Revenue climbed to RM1.24bil from RM732.1mil, it said.