Maxis offers 30% stake to raise RM 9bil

Something to watch out. Will I get to buy their shares again?

PETALING JAYA: Maxis Communications Bhd (MCB) is offering for sale 30% or 2.25 billion shares of Maxis Bhd's (Maxis) issued and paid-up capital, of which 2.33% is for retail investors and 27.67% for institutional investors as part of the celco's initial public offering (IPO).

Maxis is the country's dominant cellular player, which as at mid-June had 11.4 million mobile subscribers and controls 40% share of the Malaysian cellular market.

The offer for sale is expected to raise US$2.5bil or about RM9bil, which will be the biggest IPO in corporate Malaysia since 1995.

The offer price was not revealed in the draft prospectus that was posted on the Securities Commission website on Thursday.

Maxis will not issue new shares for the IPO and thus will not get any proceeds.

The proceeds will go to the shareholders that are making the offer for sale.

Prior to the IPO, MCB, a wholly-owned subsidiary of Binariang GSM Sdn Bhd, had implemented a restructuring exercise to consolidate its telecommunications operations in Malaysia under Maxis, said the draft prospectus.

Upon completion of the IPO, MCB will own 5.25 billion shares, or 70% of the issued and paid-up capital in Maxis.

Maxis' re-entry to Bursa Malaysia comes over two years after it was de-listed in May 2007.

Maxis' initial listing was in 2002 and at the time of the de-listing, it had a market capitalisation of RM40bil.

Maxis was privatised for RM16bil following a voluntary general offer for all of its shares by Binariang in May 2007.

Under the current listing exercise, of the 2.33% for the retail portion, 4.18 million shares representing 0.05% have been reserved for 4,175 eligible active Elite members of the Maxis One Club whose accounts are not overdue as at June 30, and 6.12 million shares, or 0.08% for 2,142 eligible active dealers and distributors of Maxis.

Maxis in the draft prospectus made it known that it would be taking on more debts to the sum of RM5bil for its expansion going forward.

The principal adviser of the deal is CIMB Investment Bank Bhd.

It is also one of the joint global co-ordinators and joint book runners for the institutional offering together with Credit Suisse (S) Ltd and Goldman Sachs (S) Pte.

"The market needs a big-cap company such as this to attract foreign institutional investor interest," Danny Wong, chief executive officer at Areca Capital said.

Maxis posted a net profit of RM2.4bil on revenue of RM8.5bil for the financial year ended Dec 31, 2008 (FY08) comparedwith a net profit of RM1.98bil on revenue of RM7.7bil in FY07.

For the first six months of FY09, the telco made a net profit of RM1.14bil on revenue of RM4.2bil.

The net tangible asset per share was 62.9 sen in the first six months and 55.9 sen in FY08.

The objectives of the IPO are to enable the company to access the equity capital markets to give it the financial flexibility to pursue growth opportunities and to "enhance" its profile.

The draft prospectus said Maxis was targeting a payout ratio of 75% of its consolidated net profit in each calendar year beginning FY010.

Via The Star