KUALA LUMPUR: Malaysia's UMW Holdings Bhd plans to sell 39 percent of its oil and gas unit in an initial public offering this year that could raise up to $1 billion, a source said Friday.
The state-backed conglomerate's announcement is the latest in a slew of planned listings, looking to build on last year's momentum that saw the Southeast Asian nation become one of the world's top IPO destinations.
UMW said in a filing to the stock market late Thursday that the listing of its UMW Oil and Gas Corporation Bhd was expected to go ahead by the fourth quarter of the year.
The company plans to sell 648.6 million shares in the unit, which provides offshore drilling and oilfield services, to institutional investors, while another 194.6 shares will be earmarked for the retail offering, it said.
UMW gave no estimate of how much money it intends to raise, but the offering could be worth as much as $1 billion because of the "quality of the asset", said a source familiar with the deal on condition of anonymity.
"It's one of the fastest growing industries in this country," the source told AFP.
UMW Oil and Gas intends to use the proceeds for debt settlement, capital expenditure and working capital for future growth, the company said in the filing.
UMW said a listing was approved in 2008 but given the "then unfavourable market conditions and sentiments" the IPO was deferred.
Malaysia saw a number of big IPOs last year, led by palm oil giant Felda Global Ventures that raised $3.25 billion.
A lull followed amid uncertainty ahead of the general elections held on May 5.
But the 56-year-ruling coalition managed to fend off a stiff opposition challenge, boosting confidence that the government's pro-investment drive will continue.
Earlier this week, Malaysian palm oil producer IOI Corp. said it planned to spin off its real-estate holdings in a listing late in the year, aiming to raise $630 million.
AirAsia X - the long-haul arm of successful budget carrier AirAsia also could raise up to $300 million in a possible July listing, a source close to the matter told AFP last week. (AFP)
