KIA pumps RM477.8m in IHH Healthcare
Second-biggest IPO in Malaysia this year after Felda
Friday, June 15, 2012 - 19:57
The investment is poised to make KIA the second-biggest investor in the Malaysian healthcare firm’s IPO.
It will be the fund’s biggest investment in an Asian flotation since it poured US$800 million (RM2.5 billion) into Agricultural Bank of China’s US$21 billion (RM66.9 billion) offering in 2010.
With a heavy reliance on cornerstone investors and domestic demand, Malaysia has bucked the dismal IPO trend in other markets such as Singapore, where motor racing firm Formula One decided to delay its near US$3 billion (RM9.6 billion) offering due to volatile markets.
In the latest blow to Asian deals, soccer club Manchester United also ditched its plans for an Asian stock market flotation and is preparing to list in the United States, IFR reported on Wednesday.
Cornerstone investors back many Asian listings, committing to buy large, guaranteed stakes and agreeing to a lock-up period during which they will not sell their shares.
KIA, which manages US$280 billion (RM891.4 billion) in assets, invests in big-ticket IPOs, but has been lately keeping its powder dry amid volatile markets, banking sources have said earlier.
Malaysia pension fund EPF will separately invest about US$200 million (RM636.7 million) in the IHH IPO, making it the biggest investor in the deal, said the sources, who could not be named because the details of the deal are not public.
“These two are the biggest cornerstone investors in IHH,” one of the sources said.
IHH declined to comment. EPF and KIA could not be immediately reached for comment.
IHH Healthcare, which is partly owned by state investor Khazanah Nasional Berhad, is the country’s second-biggest IPO this year after Felda Global Ventures Holdings priced its US$3.1 billion (RM9.9 billion) IPO late on Wednesday near the top of an indicative range.
The IHH IPO is expected to be priced in the second week of July and the listing is scheduled in the week starting July 23, according to a term sheet.
IHH this week already locked in BlackRock Inc, Capital Group and Och-Ziff Capital Management Group as cornerstone investors for its dual listing, sources told Reuters.
The board of International Finance Corp (IFC), the financial arm of the World Bank, has also approved a proposal to become a cornerstone investor in IHH’s offering, a source said.
IHH has been on an aggressive buying spree in the past few years. It now owns Turkish hospital group Acibadem AS, Singapore’s Parkway Holdings, India’s Apollo Hospitals Enterprise Ltd and Malaysia-based Pantai Hospitals and International Medical University.
The firm is offering 2.2 billion shares, out of which 80% will be new shares. The sale amounts to some 25% of its enlarged capital.
CIMB, Deutsche Bank and Bank of America-Merrill Lynch are the lead global co-ordinators, with Credit Suisse, DBS, Goldman Sachs and Maybank acting as joint bookrunners in the deal.
Nomura, Singapore’s OCBC and UBS are the co-lead managers.