NEW IPO: GAS MALAYSIA BERHAD (GMB)

 

INITIAL PUBLIC OFFERING OF 333,840,000 ORDINARY SHARES OF RM0.50 EACH IN GAS MALAYSIA BERHAD (“GMB”) (“OFFER SHARES”):

I. THE INSTITUTIONAL OFFERING OF 303,315,000 OFFER SHARES TO INSTITUTIONAL AND SELECTED INVESTORS AND BUMIPUTERA INSTITUTIONAL AND SELECTED INVESTORS APPROVED BY THE MINISTRY OF INTERNATIONAL
TRADE AND INDUSTRY AT THE INSTITUTIONAL PRICE TO BE DETERMINED BY WAY OF BOOKBUILDING (“INSTITUTIONAL PRICE”), PAYABLE IN FULL UPON ALLOCATION; AND

II. THE RETAIL OFFERING OF 30,525,000 OFFER SHARES TO THE MALAYSIAN PUBLIC, ELIGIBLE DIRECTORS AND EMPLOYEES OF GMB AT THE OFFER PRICE OF RM2.20 PER OFFER SHARE; BEING THE INITIAL PRICE PAYABLE BY THE APPLICANTS (“RETAIL PRICE”),

SUBJECT TO CLAWBACK AND REALLOCATION PROVISIONS IN CONJUNCTION WITH THE LISTING OF AND QUOTATION FOR ALL THE ISSUED AND PAID-UP ORDINARY SHARES OF GMB ON THE MAIN MARKET OF BURSA MALAYSIA SECURITIES BERHAD.

THE RETAIL PRICE IS PAYABLE IN FULL UPON APPLICATION AND IS SUBJECT TO A REFUND OF THE DIFFERENCE IN THE EVENT THAT THE FINAL RETAIL PRICE IS LES THAN THE RETAIL PRICE.

THE FINAL RETAIL PRICE WILL EQUAL THE LOWER OF:

I. THE RETAIL PRICE OF RM2.20 PER OFFER SHARE; AND

II. THE INSTITUTIONAL PRICE

Closing Date: 25 May 2012, 5pm

Price Determination Date: 25 May 2012

Balloting: 29 May 2012

Listing Date: 11 June 2012

Dividend Policy

Gas Malaysia is the sole licensed seller of natural gas in Peninsular Malaysia. It has rights to supply liquefied petroleum gas in the region.

According to the prospectus, the company intends to distribute all the earnings net of tax this year as dividend,

It is looking at a payout ratio of not less than 75% of its consolidated after tax profit for 2013.

Gas Malaysia's major spending will be this year where it will invest RM130-RM140 million for pipeline expansion and infrastructure in preparation for the distribution of the liquefied natural gas that would be supplied by Petronas from Malacca.

It would be expanding its pipeline by 70-90 kilometres to supply new customers and strengthen supply security, and it would be financed with internal funds.

At least for the next 3-4 years, Gas Malaysia doesn't need to raise extra capital, as the annual capex requirement for Gas Malaysia would be around RM30-RM40 million.

Gas Malaysia, which operates 1,800 km of pipelines across Peninsular Malaysia, gets all its natural gas supply from Petronas.

The dip in net profit to RM229.2 million for 2011 against RM298.3 million in 2010, it was due to the new gas tariff that resulted in the lower margin. Its revenue in 2011 increased to RM2 billion from RM1.807 billion in 2010.

Financial Statement Highlights:

However, the profitability should start to pick up again with growth in revenue and volume with the additional gas to be supplied by Petronas.

Gas Malaysia has 700 industrial customers, 519 commercial customers and 10,612 residential customers for natural gas, while its liquefied petroleum gas customers comprise one industrial customer, 1,132 commercial customers and 20,663 residential customers. 99% of Gas Malaysia's revenue is derived from the 701 industrial customers.

           

Upon listing, MMC-Shapadu (Holdings) Sdn Bhd will see its stake reduced to 40.7% from 55%, while Tokyo Gas-Mitsui & Co Holdings Sdn Bhd's stake will come to 18.5% from 25% and Petronas Gas Bhd's stake reduced to 14.8% from 20%.