UMW Oil & Gas offer oversubscribed by more than 10 times-source
KUALA LUMPUR Oct 3 (Reuters) - The institutional offer of UMW Oil & Gas Corp Bhd's $740 million initial share sale in Malaysia has been oversubscribed by more than ten times, according to a financial source with direct knowledge of the deal.
The institutional tranche, which makes up 15.11 percent of the offering, has been mostly subscribed at the top end of a range set between 2.70-2.80 ringgit per share on the first day, the source told Reuters on Thursday.
At the top price, UMW Oil & Gas, an offshore and drilling services firm in Malaysia, will raise up to 2.36 billion ringgit ($731.33 million), making it the largest IPO in Malaysia so far this year.
The range values the company, a unit of state-linked conglomerate UMW Holdings Bhd, at a forward price-to-earnings ratio of 17.7 to 18.3 times.
UMW Oil & Gas officials declined to comment.
The firm's 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 final pricing is expected to be fixed on Oct. 17, with listing on the local bourse scheduled on Nov. 1, according to its prospectus launched on Thursday.
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. ($1 = 3.2270 Malaysian ringgit) (Reporting By Yantoultra Ngui; Editing by Niluksi Koswanage)