THE sale of 1.53 billion shares in Indonesia's Axiata XL by its Malaysian shareholder has been oversubscribed with strong pricing, a brokerage source with direct knowledge of the matter said in Kuala Lumpur yesterday.
The bookbuilding exercise for the offer by Axiata, Malaysia's second-biggest telecoms company by market value, which owns 86.5 per cent of Axiata XL, closed yesterday.
Based on the indicative price range of 3,000-3,300 rupiah (100 rupiah = RM0.04), state-controlled Axiata could raise up to US$503 million from the offering.
"The books are looking hot, more than one time covered now and will probably strike towards the upper end of the indicative price range," said the source who did not want to be named because the information was not public. He was speaking before the close of the bookbuilding process.
Datuk Yusof Annuar Yaacob, chief financial officer of Axiata, did not answer a telephone call seeking comment.
This month, Axiata said the share offer was aimed at boosting the valuations and liquidity of Axiata XL, Indonesia's third-biggest mobile services provider. CIMB and Goldman Sachs are the joint bookrunners for the Axiata XL offer.
"They have to increase the free-float of Axiata XL. Since market sentiment has improved, this is the time for them to do what they are supposed to do," said Ang Kok Heng, who helps manage about US$125 million (US$1 = RM3.31) at Phillip Capital Management in Kuala Lumpur, and owns Axiata shares.
Ang does not expect Axiata to return cash to shareholders after the placement. "I think they will use the proceeds to repay some of the borrowings and they still need a lot of money for expansion in Indonesia."
Some analysts, including Nomura and ECM Libra, said Axiata may pay out cash dividends following the Axiata XL offer.
Axiata XL shares rose 4.48 per cent to 3,500 rupiah from 3,350 rupiah on the Jakarta stock exchange yesterday. - Reuters |
