Malaysia's UMW Oil & Gas prices share sale at top end-sources

Reuters

By Yantoultra Ngui

KUALA LUMPUR, Oct 13 (Reuters) - Malaysia's UMW Oil & GasCorp Bhd, an offshore and drilling services firm, hasraised about 2.36 billion ringgit ($740 million) in its IPO,pricing it at the top of expectations, two sources with directknowledge of the deal said on Sunday.

The strong demand for the country's largest IPO this year,signalled a boost for Malaysia's capital market on pent-updemand for emerging market stocks.

This month, port operator Westports Holdings Bhd priced its $680 million IPO at the top of its projected range.

UMW Oil & Gas, a unit of state conglomerate UMW Holdings Bhd, priced the offering at 2.80 ringgit per share versusa tight indicative range of 2.70-2.80 ringgit, said the sources,who were not authorised to speak publicly on the matter

"It was oversubscribed by more than 50 times," one of thesources said, adding that the offer to institutional investorswas closed on Thursday, well ahead of the originally scheduledOct. 17.

Its parent plans to take 647.9 million ringgit of theproceeds to pay debt and finance capital expenditure, while UMWOil & Gas will use the remaining 1.7 billion ringgit to buyrigs, clear debts and pay listing expenses.

The company leaned heavily on cornerstone investors, rangingfrom Fullerton Fund Management Company to FIL InvestmentManagement, who accounted for 47.3 percent of the total offer.

Banking sources said foreign funds have started returning tothe region, jostling to bid for initial share sales after theU.S. Federal Reserve's unexpected decision not to withdrawstimulus.

UMW Oil & Gas officials could not be reached for comment onSunday.

CIMB, Credit Suisse, Goldman Sachs and Maybank are the joint global co-ordinatorsfor UMW Oil & Gas, and also the joint bookrunners with StandardChartered.

(Editing by Robert Birsel)

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