By Yantoultra Ngui
KUALA LUMPUR, Oct 13 (Reuters) - Malaysia's UMW Oil & Gas Corp Bhd, an offshore and drilling services firm, has raised about 2.36 billion ringgit ($740 million) in its IPO, pricing it at the top of expectations, two sources with direct knowledge 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-up demand 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 versus a 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 the sources said, adding that the offer to institutional investors was closed on Thursday, well ahead of the originally scheduled Oct. 17.
Its parent plans to take 647.9 million ringgit of the proceeds to pay debt and finance capital expenditure, while UMW Oil & Gas will use the remaining 1.7 billion ringgit to buy rigs, clear debts and pay listing expenses.
The company leaned heavily on cornerstone investors, ranging from Fullerton Fund Management Company to FIL Investment Management, who accounted for 47.3 percent of the total offer.
Banking sources said foreign funds have started returning to the region, jostling to bid for initial share sales after the U.S. Federal Reserve's unexpected decision not to withdraw stimulus.
UMW Oil & Gas officials could not be reached for comment on Sunday.
CIMB, Credit Suisse, Goldman Sachs and Maybank are the joint global co-ordinators for UMW Oil & Gas, and also the joint bookrunners with Standard Chartered.
(Editing by Robert Birsel)