Malakoff IPO is biggest equity market deal

  • Business
  • Friday, 25 Dec 2015

PETALING JAYA: The listing of Malakoff Corp Bhd, a subsidiary of MMC Corp, topped the list of top 10 equity capital market (ECM) deals for the year that amounted to RM16.5bil.

Proceeds from the initial public offering (IPO), amounting to RM3.4bil (US$792.2mil) are to be used to fund Malakoff’s growth as well as to cut MMC’s debt and improve its capital structure.

The IPO entails a total of 1.52 billion shares, with 84% for institutional investors and the rest for retail investors.

Out of the top 10 deals in the ECM segment of investment banking, most companies opt to embark on rights issues to raise funds.

After Malakoff’s listing, Hong Leong Bank Bhd’s (HLB) rights issue exercise to raise RM3.03bil (US$702.3mil) is the second largest deal in the ECM segment.

The rights issue of US$702.2mil (RM3.03bil) will raise HLB’s fully-diluted common equity Tier-1 (CET1) ratio by 2.5% to 11.2%, a move that will shore up the bank’s capital position to comply with Basel III requirements.

Basel III requires banks to have more top-quality capital totalling 7% of their risk-bearing assets, up from the original 2%.

Meanwhile, the rights issue exercise by RHB Capital Bhd was to enable further strengthening of its capital position to meet the requirements of Basel III as well.

The rights issue amounting to US$549.3mil (RM2.37bil) will support the group’s business growth and see RHB Banking Group moving towards a bank holding company structure, in line with major banking groups across Asean.

Apart from that, Malaysia Airports Holdings Bhd’s rights issue raised gross proceeds of US$355.7 (RM1.53bil). The approved rights issue will increase MAHB shareholders’ capital by 20%.

This will also strengthen MAHB’s financial position by improving liquidity and financial flexibility, as well as optimising MAHB’s capital structure.

Hong Leong Financial Group Bhd raised a total of US$257.9mil (RM1.11bil) in its rights issue exercise. This is to subscribe for its rights entitlement in HLB’s own RM3.6bil rights issue.

Property developer Eco World Development Group Bhd raised a sum of US$214.5mil (RM924.83mil) from its rights issue in March 2015. This was part of its corporate exercise which raised a total of RM2.8bil.

In addition, Eco World issued a placement worth US$178.8mil (RM770.91mil).

With the completion of the corporate exercise, the group is well-placed to proceed with its growth and expansion plans to achieve its RM7bil sales target for the financial years 2015 and 2016.

In addition, Mah Sing Group Bhd, in February 2015, raised US$175.8mil (RM758mil) from a rights issue exercise.

This was for the purpose of land acquisition and general working capital.

A total of RM107.2mil from the total proceeds was earmarked for part payment of its Seremban land.

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