The roughly US$500mil IPO, Malaysia’s largest so far this year, comes amid a faltering market for new offerings as investors fret about further financial troubles in Europe and its impact on the global economic recovery.
The IPO also comes ahead of a host of offerings by Petroliam Nasional Bhd and MISC Bhd, scheduled for the second half of this year.
“The book is fully covered. It’s oversubscribed by about 1.2 times now,” said one of the sources, who asked not to be named because he is not authorised to speak to the media.
“All the local funds are in and we’re still getting international orders. It’s quite an achievement, given the current market conditions,” the source said.
But Sunway REIT may have to price its IPO at the lower end of its indicated range because of deteriorating market conditions, said the sources.
The company last week set the indicative price range for the sale of 1.6 billion units of the REIT at between 90 sen and 98 sen per unit.
This means the IPO could raise RM1.44bil to RM1.57bil.
The global market for IPOs, which had shown signs of a resurgence early in the year, faces a spate of delays and downsizings, underscoring difficulties for mega deals such as Agricultural Bank of China’s IPO.
Sunway said earlier this month it had secured four cornerstone investors who would take 14% of the IPO.
Sunway REIT will have a market capitalisation of RM2.4bil to RM2.6bil when it is listed on July 8.
The IPO, comprising an institutional tranche of 1.5 billion units, more than 90% of the total, and a retail portion of 134 million units, is expected to be priced on Friday.
The REIT will house eight properties, comprising shopping malls, office towers, and hotels with a combined market value of about RM3.7bil.
Credit Suisse and RHB Investment Bank are the joint global coordinators of the deal. The banks, along with CIMB, HSBC, JPMorgan and the investment banking arm of Maybank are joint bookrunners.
By Reuters
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