KUALA LUMPUR: UMW Oil & Gas Corporation Bhd, a Malaysian offshore and drilling services firm, will start taking orders on Oct. 3 for its 2.36 billion ringgit ($737.73 million) initial share sale, sources with direct knowledge of the deal said.
The initial public offering, set to be the biggest in Malaysia this year, will help fill a deals pipeline that has virtually dried up due to market volatility and political uncertainty ahead of a general election in May.
UMW Oil & Gas, the oil-field services arm of state-backed conglomerate UMW Holdings Bhd, is expected to trade on the local bourse on Nov. 1, the sources said.
"But it is still too early to determine the book building range," said one of the sources, declining to be named as the matter was private.
Officials at UMW Oil & Gas and its parent were not immediately available to comment.
UMW Oil & Gas is seeking to sell 843.1 million shares at the maximum indicative price of 2.80 ringgit per share.
Its parent plans to take 647.9 million ringgit of the proceeds to pay debt and finance capital expenditure, while UMW Oil & Gas will use the remaining 1.7 billion ringgit to buy rigs, clear debts and pay listing expenses.
UMW Oil & Gas will offer 648.6 million shares, or 76.9 percent of the total shares sold, to institutional players. The balance will go to retail investors, according to its draft prospectus in June.
Up to 17 cornerstone investors will take up 61 percent of the institutional tranche, the sources said.
The investors include Fidelity Investments, Hwang Investment, Fullerton Fund and Malaysian state-owned funds such as the Employee Provident Fund, the sources added.
The investors could not be immediately reached for comment.
A successful IPO will help boost the outlook for other bigger listings next year.
State investor 1Malaysia Development Bhd is looking to raise at least $3 billion in 2014 in an IPO of its power assets, making the deal one of Southeast Asia's largest public stock offerings.
CIMB, Credit Suisse, Goldman Sachs and Maybank are the joint global co-ordinators for UMW Oil & Gas, and are joint bookrunners with Standard Chartered.- Reuters