Boustead Plantations IPO Oversubscribed by 6 times

Boustead Plantations Berhad Initial Public Offering (IPO) received an overwhelming response with its public portion of 64 million shares. It was oversubscribed by 6  times. The IPO attract 30,787 applications for 448 million shares.

The Institutional Price was fixed at RM1.60 per Offer Share. Accordingly, the Final IPO Price for the Retail Offering is fixed at RM1.60 per Offer Share as set out in the prospectus. As such there is no refund to be made to successful retail applicants.

Notices of Allotment will be dispatched by post to all successful applicants on or before 25th June 2014. Boustead Plantations is expected to be listed on the Main Market of Bursa Malaysia on 26th June 2014 under stock name “BPLANT”.

Detail please refer to Bursa Malaysia webpage

Econpile Holdings Bhd IPO

Piling and foundation specialist Econpile Holdings Bhd, which is en route for listing on Bursa Malaysia, has signed an underwriting agreement with RHB Investment Bank Bhd for the company’s initial public offering (IPO) exercise.RHB Investment Bank will act as the principal adviser, underwriter and placement agent for the IPO, which is slated for mid-year.

Econpile’s IPO entails a public issue of 90 million new shares and an offer for sale of 55 million vendor shares.

Of the 90 million new shares under the public issue, 27 million shares will be for application by the local public while 3.5 million shares are allocated to eligible directors, employees, and business associates of the group.

Some 47.5 million shares will be allocated through private placement to identified investors, while 12 million shares will be allocated via private placement to Bumiputera investors approved by the International Trade and Industry Ministry.

Additionally, 55 million shares under the offer-for-sale will be allocated by way of private placement to identified Bumiputera investors.

For the financial year ended June 30, 2013 (FY13), Econpile’s profit after tax surged 61.74% to RM27.87mil from RM17.23mil in the year before, while turnover leapt 26.25% to RM386.07mil versus RM305.78mil previously.

Econpile, which mainly serves the Malaysian market, said it has a policy to pay out at least 20% of profit after tax in dividends annually.

The construction firm’s promoters are group managing director The Cheng Eng, executive director and group CEO Raymond Pang Sar and executive director The Kun Ann, who is Cheng Eng’s daughter.

Cheng Eng and Raymond equally control 100% of the company. Post-listing, their stakes will be reduced to 36.4% each.

Icon Offshore Berhad IPO

EKUITI Nasional Bhd's first spinoff,  Icon Offshore Bhd, en route to a listing on  Bursa Malaysia's Main Market on June 25, aims to raise about RM1 billion through its initial public offering (IPO). Ekuinas, which was mandated in 2009 to invest in Bumiputera companies to build up their capacity,  had invested in two Bumiputera OSV companies,  namely Tanjung Kapal Services Sdn Bhd and Omni Petromaritime Sdn Bhd, before merging them  to create Icon Offshore in 2012.

As at April 30, the company boasts of 32 vessels available for charter and operating in waters off Malaysia, Thailand and Qatar. The company plans to add seven more vessels to its fleet by year-end. According to the prospectus, Icon Offshore owns one of the youngest fleet in the region with an average age of five years, versus the Southeast Asia average of 11 years. In Icon Offshore’s case, 90% of its fleet is serving out three to five year retainer contracts, providing a buffer to swings in the market.

The bulk of its fleet is locked into time charters, which typically last 12 months or longer. Its average utilisation has dipped from 88% in 2011 to 84% last year.

Some 70% of its jobs come from Petronas, which the firm is hoping to reduce by expanding into the region.

At an indicative initial public offering (IPO) price of RM1.85 a share, the oil and gas support services provider will be listed at a price-to-earnings multiple (PE) of 18 to 19 times its estimated 2014 earnings – a premium over the sector average of 13 times.

Its peers such as Perdana Petroleum Bhd and Alam Maritim Resources Bhd are currently trading at 13 times their forecast earnings this year, and between 11 and 12 times their expected profit in 2015, Bloomberg data showed.

On a historical basis, the listing price is a steep 24 times the company's earnings per share of 7.61 sen last year. Its 2015 valuations are more reasonable at 13 to 15 times earnings.

At these levels, the offshore support vessel (OSV) owner-operator is commanding valuations that are closer to the large cap, integrated players like Bumi Armada Bhd and SapuraKencana Petroleum Bhd.

 Its debt load, which is a staggering RM1.1bil, will shrink to RM743.65mil once some of it is paid off with the listing proceeds. 

The company's net gearing ratio of 2.78 times will also drop to 0.65 times post-IPO. Notably, its current borrowings are more than double its firm orderbook of RM502.4mil.

Icon Offshore’s total orderbook, inclusive of optional extensions, is valued at RM700.1mil. 

The firm posted net profit and sales of RM89.57mil and RM334.86mil last year. Its profit after tax margin had improved to 26.7% as at last year from 19.6% in 2011.

Icon Offshore is expected to match its historical growth rates of double-digit growth, says Jamal.

Its net profit and revenue jumped by a compound annual growth rate of 41.9% and 21.6%, respectively, in the three-year period up to 2013.