Gas Malaysia IPO to raise around $250 mln -source

By Min Hun Fong

Aug 17 (Reuters) - Malaysian builder MMC will raise up to 750 million ringgit ($251.6 million), or about 2.25 ringgit per share, from the listing of its unit Gas Malaysia on the Kuala Lumpur stock exchange, a source with direct knowledge of the deal said.

MMC said in an exchange filing on Tuesday that it would sell about 333.8 million shares, or 26 percent of Gas Malaysia's entire share capital. It said the share capital was valued at 642 million ringgit at par.

"They are looking to raise about 750 million ringgit by the end of this year," said the source, who cannot be identified as the IPO has not been formally anounced yet.

Newly listed Malaysian companies have generally had mixed performances this year owing to volatile capital markets.

While bigger listings such as Bumi Aramada and MSM Malaysia Holdings have generally rewarded investors well for their initial buy-ins, smaller IPOs have seen prices take a beating from negative sentiment.

Gas Malaysia, based on the indicative pricing, is valued at about 3 billion ringgit.

"The listing is definitely interesting because it's a play on the industrialisation of Malaysia and the increased usage of gas, and it's a good, stable utility business," said HwangDDS Investment Management's equities investment head Gan Eng Peng.

Gas Malaysia's offering follows the listing of offshore oil and gas service provider Bumi Armada, which raised 2.66 billion ringgit last month from the country's largest initial public offering this year.

"There could be (a series of IPOs now). A couple of them this year and more next year," a reasearch analyst from TA Securities said.

"Petronas Carigali or Petronas Penapisan could be listed next year or the end of this year. Downstream players look more attractive at this point of time," he added.

MMC in its exchange filing on Tuesday said it expected to complete the listing by the last quarter of 2011.

"The proposed listing will enable MMC and its subsidiaries to accelerate the growth of gas supply and distribution business under Gas Malaysia," MMC said in a filing to the stock exchange.

Gas Malaysia distributes gas to residential, commercial and industrial customers in peninsular Malaysia.

The investment arm of Maybank , Malaysia's largest lender, has been appointed the adviser for the IPO.

Malaysia's oil and gas sector is changing rapidly as dwindling supplies of local oil and gas have pushed state oil firm Petronas and the government to take immediate steps to arrest the decline.

Petronas has accelerated its capex spend to 300 billion ringgit over the next five years -- from 35 billion ringgit it spent in the 2010/11 fiscal year -- while the government has made sector consolidation a key agenda in its 10-year plan of economic rejuvenation. ($1 = 2.980 Malaysian Ringgit) (Editing by Purwa Naveen Raman)

http://www.reuters.com/article/2011/08/17/gasmalaysia-idUSL3E7JH0B020110817