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PETALING JAYA: MMC Corp Bhd’s subsidiary Gas
Malaysia Bhd (GMB) is offering 333.84 million ordinary shares of 50
sen each in its initial public offering (IPO).
This
represents 26% of the existing issued and paid-up share capital of
GMB.
In its prospectus exposure on the Securities Commission
website, GMB said its institutional offering would consist of 147.68
million shares to be offered to Bumiputra institutional and selected
investors approved by the International Trade and Industry Ministry,
and 155.8 million shares to be offered to institutional and selected
investors.
The retail offering will consist of 4.66 million
shares to be offered to eligible directors and employees of GMB, and
25.68 million shares to be offered to the public.
GMB sells,
markets and distributes natural gas as well as constructs and
operates the natural gas distribution system in Peninsular Malaysia.
The company has 1,800km of pipelines in operation across the
peninsula serving 698 industrial customers, 482 commercial customers
and 10,926 residential customers for natural gas.
It is the
only company licensed by the Energy Commission to supply and sell
reticulated natural gas in the peninsula.
In its prospectus
exposure, the company said business related risks include the buying
and selling prices of natural gas which are regulated and controlled
by the Government, the execution of new gas supply agreement with
Petronas and dependency on Petronas for supply of natural gas.
It also pointed out that the industrial market makes up for
slightly more than 99% of the total volume of natural gas sold for
the 18 months ended June 30, 2011.
"We expect that our heavy
reliance on the industrial sector to drive our profits will continue
into the future. Any adverse changes in the economic climate of the
country and the industrial sector could have a material adverse
effect on our business." Its future plans and strategies includes
expansion of its customer base via securing additional allocation of
natural gas supply from Petronas with the expected completion of the
liquefied natural gas regasification facility in Malacca by
mid-2012.
The company is also diversifying into the CHP
(combined heat and power) business where it plans to operate CHP
plants for the sale and generation of electricity and thermal
energy.
No further dividend is expected to be declared and
paid for the financial year ending Dec 31, 2011 (FY11).
For
FY12, the company intends to propose a dividend payout ratio of 100%
of its profit after tax, and thereafter, targets a dividend payout
ratio of not less than 75% of profit after tax in each subsequent
financial year.
The company will not receive any proceeds
from the IPO as it will not be issuing any new shares under the IPO.
"The board is of the view that the company presently does not
require additional equity funding for its business." As at June 30,
2011, the group has total assets of RM1.53 bill and shareholders’
equity of RM915.8mil.
For FY10, the company recorded a profit
after tax of RM298.3 mill on the back of revenue of RM1.8 bil.
For the six months ended June 30, 2011, the company posted a
profit after tax of RM135.5mil on the back of revenue of RM951.2
mil. Upon completion of the lPO, MMC-Shapadu (Holdings) Sdn Bhd will
own about 40.7 of the enlarged issued and paid-up share capital of
the company.
Tokyo Gas-Mitsui & Co Holdings Sdn Bhd and
Petronas Gas Bhd will own 18.5% and 14.8% respectively.
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