UPDATE 1-Malaysia's Icon Offshore jumps in debut on rosy outlook for oil demand

Tue Jun 24, 2014 9:39pm EDT

Related Topics

* Icon Offshore up 12 pct after $295 mln IPO

* Investors banking on strong demand for offshore supply vessels

* To use IPO funds to expand fleet and repay debt (Recasts on growth outlook, adds fund manager quote)

By Yantoultra Ngui

KUALA LUMPUR, June 25 (Reuters) - Malaysia's Icon Offshore Bhd, whose ships offer support services for oil platforms, rose 12 percent in its market debut, with investors keen on its growth outlook given heavy capital spending plans by state oil firm Petronas.

Icon, 88 percent held by Ekuiti Nasional (Ekuinas), a government-owned private equity fund, is the country's largest pure-play offshore service vessel provider, with 32 ships and 14 percent of the domestic market.

It has a young fleet with an average age of 5 years compared to 11 for Southeast Asian rivals and is well placed to benefit from Petroliam Nasional Bhd's (Petronas) efforts to increase oil production. Icon plans to use the $295 million raised in its IPO to expand its number of ships to 39 and to repay debt.

"The listing comes at a good time. Oil prices are strong because of the conflict in Iraq and the global economy looks pretty good," a local fund manager said, declining to be identified as he was a buyer of the stock.

Icon's debut should also help continue to keep the focus on Malaysia's vibrant oil and gas sector, he added.

The stock was trading at 2.08 ringgit on Wednesday morning, compared with its IPO price of 1.85 ringgit per share. At one point it rose as high as 2.19 ringgit. The broader market declined 0.2 percent.

Petronas has targeted capital spending of $19 billion annually in the five years to 2016, and research firm Infield Systems has forecast the number of operating oil platforms in Malaysia will increase to 519 by end-2019 from 406 last year.

Southeast Asia's crude oil demand is expected to rise over 50 percent in the next 20 years, hitting 6.8 million barrels per day by 2035 according to the International Energy Agency's energy outlook report released late last year.

Icon announced on Monday a six-fold jump in first-quarter net profit to 19.5 million ringgit from the same period a year ago due to a lower tax rate and a 23 percent climb in revenue.

Petronas, however, accounted for 80 percent of Icon's revenue last year and heavy dependence on the state oil firm could work against Icon if Petronas decides to scale back its plans.

BNP Paribas, Credit Suisse and Maybank Investment Bank were joint global co-ordinators of the IPO. ($1 = 3.2170 Malaysian Ringgit) (Reporting by Yantoultra Ngui; Editing by Edwina Gibbs)

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