Malaysia's Ranhill Energy prices share sale at top end -source

KUALA LUMPUR, July 15 Mon Jul 15, 2013 9:58am EDT

KUALA LUMPUR, July 15 (Reuters) - Malaysia's Ranhill Energy & Resources Bhd has raised about 753 million ringgit ($237.02 million) in a share sale, pricing the deal at the top of expectations, a source with direct knowledge of the deal said on Monday.

Ranhill, which plans to use the proceeds to repay debt and expand into China's water industry, priced the initial public offering (IPO) at 1.85 ringgit per share versus an indicative price range of 1.70-1.85 ringgit, said the source, who was not authorised to speak publicly on the matter.

IPOs and secondary share offerings have picked up in Malaysia due to an easing in political uncertainty after general elections in May.

AirAsia X Bhd made its debut last week and UMW Holdings Bhd is planning to list its oil and gas unit by the end of the year in a deal set to raise up to $1 billion, the country's largest this year.

Ranhill and investment fund Cheval Infrastructure Fund LP, a shareholder, offered 407 million shares or about 43 percent of the company's enlarged share capital.

After the offering, Chief Executive Hamdan Mohamad will be the company's biggest shareholder with 39 percent of the company while Cheval will own 15.8 percent. Cornerstone investors include Corston-Smith Asset Management Sdn Bhd and Eastspring Investment Bhd.

While the vast majority of the proceeds will go towards redeeming Islamic notes and bonds, it will also invest in expanding its water treatment capacity in China, where it aims to have capacity of 1,000 million litres per day (MLD) in five years.

It currently operates five water and waste water treatment plants there, with a combined capacity of 270 MLD.

China plans to spend $850 billion over the next decade on improving its scarce and polluted water supplies and many Asian water firms, including Singapore's Hyflux Ltd and United Envirotech Ltd, are keen to make their mark in the country.

Ranhill said the expansion in capacity is expected to give the company 500 million ringgit in revenue a year with a profit of around 150 million ringgit. It earned 150 million ringgit in revenue from its water business in China last year.

Maybank Investment Bank is the principal adviser for the IPO. CIMB Investment Bank and Maybank Investment Bank are the joint global coordinators and bookrunners. They are also the underwriters for the deal.

($1 = 3.1770 Malaysian ringgit) (Reporting by Yantoultra Ngui; Editing by Stuart Grudgings and Louise Heavens)

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