ICON Offshore Berhad has locked in nine cornerstone investors ahead of the roadshow for its initial public offering of shares, which is scheduled to kick-off on Monday.
AIA Berhad, Hwang Investment Management Berhad, JF Asset Management, Lembaga Tabung Haji, Maybank Asset Management, Nomura Asset Management, Permodalan Nasional Berhad, Tan Sri Dato Chua Ma Yu and UOB Asset Management have pledged to buy up a combined 275 million shares, more than half of the shares on offer.
ICON Offshore, Malaysia’s largest pure-play offshore supply vessel operator, aims to raise up to US$293 million by pricing 510.8 million shares at between M$1.80 and M$1.85 per share.
BNP Paribas, Credit Suisse and Maybank are the lead managers.
The 510.8 million shares in the IPO represent 43.4% of the company's enlarged share capital. According to a term sheet seen by FinanceAsia, 43% of the shares will be primary and 57% secondary.
The roadshow begins on Monday in Kuala Lumpur, with company executives also travelling to Singapore and Hong Kong to meet with institutional investors and hedge funds.
Most of the proceeds will go towards expanding ICON Offshore's fleet of ships and to repaying debt.
ICON Offshore's IPO represents the first public divestment by Ekuiti Nasional Berhad (Ekuinas), the government-linked private equity group that has a remit to promote and develop indigenous companies. It also offers investors a chance to get exposure to the exploration and production activities of Petroliam Nasional Berhad (Petronas). Petronas’ hydrocarbon arm, Petronas Carigali, is ICON’s main client, and accounted for 71.7% of total revenues in 2013.
ICON services Petronas’ shallow water operations, mainly by towing rigs. It has a total fleet of 32 ships, with an additional seven on order.
Comparables
Comparable companies include Bumi Armada Berhad, an offshore oil services provider, and Alam Maritim Resources, an investment holding company with marine transportation support services, construction-related operations, a sub-sea engineering division and a maintenance unit for the upstream oil and gas industry.
Shares in Bumi Armada have lost about 13% so far this year and are trading at 20.16 times forward earnings, while Alam Maritim has a forward price-earnings ratio of 12.52 times.
Malaysia Marine and Heavy Engineering, another company with exposure to Petronas’s hydrocarbon operations, is up 8% this year and trading at 26.95 times its forward earnings.
At M$1.85 per share, the ICON Offshore deal is being marketed on a price-earnings ratio of 17.6 times estimated 2014 earnings and 13.1 times its expected 2015 earnings.
ICON is one of the latest companies in Malaysia seeking to float shares after 7-Eleven Malaysia priced its US$227 million IPO at the top end of its range.
