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Malaysia's Maxis seeks $3.4B in SE Asia's top IPO

Malaysia's Maxis seeks $3.4B in SE Asia's top IPO

Malaysia's top telecommunications company Maxis Berhad launched an initial public offering Wednesday to raise at least 11.7 billion ringgit ($3.4 billion) in the biggest share sale in Southeast Asia.
Maxis is offering for sale 2.25 billion existing shares, representing 30 percent of its total equity, at an indicative price of 5.20 ringgit ($1.50) per unit, the company said in its prospectus.
Of the 30 percent stake, only 2.83 percent will be offered to retail investors while the rest will be sold to local and foreign institutional investors, it said.
The share sale marks the return of Maxis to the local bourse two years after it was taken private by billionaire tycoon Ananda Krishnan in 2007. Its relisting followed a request by Prime Minister Najib Razak who is seeking to bolster Malaysia's capital markets.
"It was envisaged that the relisting of Maxis would attract the attention of local and regional investors, enlarge Bursa Malaysia's market capitalization and also add to the range of large, well managed companies available on our stock market," said Maxis chairman Raja Arshad Tun Uda.
Maxis, however, is listing only its domestic operations _ a move some analysts said may make the IPO less attractive as it excluded its fast growing businesses in India and Indonesia.
Nazir Razak, chief executive of CIMB Group which is the adviser for the IPO, said Maxis would be the fourth largest company with a market capitalization of 39 billion ringgit ($11.5 billion) when it is listed Nov. 19.
He said the IPO was the largest ever in Southeast Asia.
Maxis enjoys a 40 percent share in the domestic mobile market, allowing investors to participate in its steady revenue without risks from its international ventures, he said.
Four major investors including Fidelity _ the world's biggest mutual fund company, and Malaysia's Employees Provident Fund _ have committed to buy 28 percent of the IPO, and are not allowed to sell the shares within six months, he said.
The prospectus said Maxis plans to pay an annual dividend of at least 75 percent of its profit. The sale price for the IPO shares will be finalized when the offer closes Nov. 10.
Despite a lower demand for IPOs in the region, Nazir voiced confidence in the success of Maxis share sale, citing the company's strong track record and good growth prospects in the Malaysian market.
South Korea's Posco Engineering and Construction recently canceled its planned share offering while China-based developer Evergrande has sharply cut its fund-raising target by nearly 61 percent for its IPO in Hong Kong.