March 26, 2023

DealBook: IHH Healthcare of Malaysia Raises $2 Billion in I.P.O.

IHH Healthcare's chairman, Abu Bakar Suleiman, left, with Prime Minister Najib Razak of Malaysia, holding the prospectus for the company.Bazuki Muhammad/ReutersIHH Healthcare’s chairman, Abu Bakar Suleiman, left, with Prime Minister Najib Razak of Malaysia, holding the prospectus for the company.

HONG KONG — IHH Healthcare, one of Asia’s biggest hospital operators, raised $2 billion selling shares in Malaysia and Singapore on Thursday in the world’s third-largest initial public offering this year. The shares priced at the top of the range after having been marketed at 2.67 ringgit to 2.85 ringgit apiece.

While global investors have shown scant appetite for huge new listings since Facebook’s botched $16 billion I.P.O. on the Nasdaq stock market in May, Malaysia has emerged as a relative bright spot.

The Southeast Asian nation was also home to the world’s second-biggest offering of the year, the $3.1 billion listing of the palm oil producer Felda Global Ventures on the Kuala Lumpur exchange in June.

IHH, owned by the Malaysian state investment firm Kazanah Nasional and the Japanese trading house Mitsui Company, sold 2.23 billion shares, or a 27 percent stake in the company, pricing the dual offering at 2.80 Malaysian ringgit and 1.11 Singapore dollars a share, or 87 American cents a share, according to stock exchange filings.

IHH employs 24,000 people worldwide at 30 hospitals with more than 4,900 beds, and claims a leading market position in Singapore, Malaysia, Turkey, China, Hong Kong and India.

As a part of the offering, the Dubai-based private equity group Abraaj cashed out its entire 7 percent stake, worth $381 million and consisting of 434.65 million existing shares. The rest of the I.P.O. shares, most of which were sold in Malaysia, were new shares.

Similar to last month’s Felda deal, the IHH share sale was heavily reliant on so-called cornerstone investors to help ensure its success. Cornerstones are large strategic or financial investors who are allotted a large chunk of shares in exchange for agreeing to hold them for a specified lockup period during which the shares cannot be sold.

IHH sold 1.39 billion shares to more than 20 cornerstone investors, accounting for an uncommonly high 62 percent of the total offering. Investors including the AIA Group, Blackrock Investment Management, the Government of Singapore Investment Corporation and the Kuwait Investment Authority all agreed to a six-month lockup on their shares.

Bank of America Merrill Lynch, C.I.M.B. and Deutsche Bank were the joint coordinators of the deal, while Credit Suisse, DBS Bank and Goldman Sachs were the joint bookrunners.

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DealBook: Felda Shares Soar 20% on the Heels of $3.1 Billion I.P.O.

Farmers harvesting oil palm fruit. Felda Global Ventures of Malaysia is a major producer of palm oil.Samsul Said/ReutersFarmers harvesting oil palm fruit. Felda Global Ventures of Malaysia is a major producer of palm oil.

HONG KONG — Shares in Felda Global Ventures rose as much as 20 percent in their trading debut in Kuala Lumpur, Malaysia, on Thursday following the palm oil producer’s successful $3.1 billion initial public offering earlier this month.

Shares in Felda, which was privatized by the Malaysian government in the world’s second biggest I.P.O. of the year behind that of Facebook, rose as high as 5.46 Malaysian ringgit, or $1.71, apiece in morning trading.

The opening day pop briefly increased Felda’s market value by an additional $1 billion, before the shares gave up some of their gains to settle at 5.30 ringgit apiece at the close of trading on Thursday, 16 percent above the I.P.O. offering price of 4.55 ringgit.

Felda’s is a rare success story in Asian markets, which continue to struggle with weak trading volumes and lackluster demand for new offerings because of investor worries about Europe’s debt crisis and a lingering economic slowdown in China.

Recent weeks have seen a series of large I.P.O.’s in Asia and elsewhere withdrawn or postponed because of slumping markets. Those included a planned $3 billion offering by the Formula One racing outfit in Singapore and a $1 billion Hong Kong share sale by Britain’s Graff Diamonds.

Still, several smaller deals have managed to get through. Earlier this week, China Nonferrous Mining successfully priced its $247 million Hong Kong share sale, while in Indonesia, the media company PT MNC Sky Vision priced its $226 million deal, according to the term sheets for both offerings.

Felda, which draws about 80 percent of its revenue from sales of crude palm oil within Malaysia, sold 1.92 billion shares to institutional investors at the offer price and 273 million shares to retail investors at a 2 percent discount, according to its prospectus.

Of the total I.P.O. proceeds of 9.93 billion ringgit, about 55 percent went to the government, which sold a 33 percent stake, and about 45 percent went to the company, mainly for the purchase of new plantations. Felda already has about 880,000 acres of palm plantations in Malaysia, according to its Web site.

CIMB, Maybank and Morgan Stanley were the joint bookrunners for the I.P.O., while the three banks, in addition to Deutsche Bank and JPMorgan Chase, underwrote the retail offering.

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