Race on for Iskandar IPOs

KUALA LUMPUR: Two master developers with large tracts of land in Johor are racing to go public next year.

Medini Iskandar Malaysia Sdn Bhd, which is majority owned by  Iskandar Investment Bhd (IIB), is planning to raise RM2.58 billion through a listing in the first half of next year, according to Reuters quoting sources.

“Banks are pitching for the deal,” said a source, adding that the plan is still in the preliminary stage. The sources declined to be named because the matter is private.

A representative at Medini Iskandar was not immediately available to comment.

Medini Iskandar is not the first master developer to seek a listing on the exchange.

Earlier this year there were reports of Iskandar Waterfront Holdings Bhd (IWH), the master developer of waterfront land 25km along the coast of the Straits of Johor, seeking a listing by end of this year.

After the May general election, there was speculation the listing may be put off indefinitely.

However, an executive close to the state government said IWH’s listing is on track for the early part of next year.

“The state has in principle agreed to the listing of IWH. It is only a matter of getting the documentation right,” said the executive.

IWH’s shareholders are Kumpulan Prasarana Rakyat Johor (KPRJ) and property tycoon Tan Sri Lim Kang Hoo through Credence Resources Sdn Bhd.

In addition, Khazanah Nasional Bhd and the Empoyees Provident Fund (EPF) have interest in certain development projects that are under the purview of IWH as the master developer.

It is said that IWH’s listing may raise more than RM1 billion and its concept of development is to create a waterfront city in Johor Baru to cater to the growing number of Singaporeans who are looking at acquiring property in the state due to high property prices on the island.

IWH has already established several joint ventures with local developers and foreign parties to build high rise condominiums facing the waterfront.

“It is styled after Manhattan with tight security to cater to Singaporeans or expatriates who find the cost of living and doing business in Singapore high,” a property consultant said.

As for Medini Iskandar, apart from IIB, the other shareholders are United World Infrastructure of Dubai and Japan’s Mitsui & Co Ltd.

Medini Iskandar is the master developer of Medini, the central business district in Bandar Nusajaya, and the company has some 903ha of land under its stable.

Medini’s development is progressing fast with the likes of the Legoland theme park already completed and Pinewood Iskandar Malaysia Studies under construction.

Several developers also have big projects there. They include Mah Sing Bhd, WCT Bhd and the Sunway group.

According to Medini’s official website, Medini will be developed into an urban township consisting of luxury condominiums, hotels, hospitals and education centres, with an expected combined gross development value of more than RM68 billion over a 20-year period.

Khazanah Nasional holds a 60% equity stake in IIB, while the EPF and Kumpulan Prasarana Rakyat Johor Bhd each own 20%.

IWH and Medini Iskandar’s IPOs would see the companies joining a handful of other listed “master developers” in Asia, such as the Philippines’ Ayala Corp and Japan’s Mitsubishi Estate Co Ltd, according to Reuters.

Those companies typically develop a region and have a number of property companies in their stable.

Malaysia has seen a pick-up in IPOs and secondary share offerings after a lull amid political uncertainty ahead of the general election in May.

Long-haul carrier AirAsia X Bhd raised RM988 million in an IPO earlier this month. Westports Malaysia Sdn Bhd, operator of the country’s busiest port, is expected to list in October this year in a deal that will raise up to RM1.5 billion.

But 2013 has not been all smooth sailing for the Malaysian IPO market, which was the biggest in Asia-Pacific excluding Japan last year.

MMC Corp Bhd announced in May that it was postponing the RM3 billion listing of its power generation unit Malakoff Bhd until the first half of 2014, citing delays caused by maintenance work. That would have been the country’s largest IPO this year, according to Reuters

Last week Ranhill Energy & Resources Bhd cancelled its IPO, which had been derailed after state oil firm Petroliam Nasional Bhd suspended the licence of an affiliate company earlier this month.

This article first appeared in The Edge Financial Daily, on July 30, 2013.


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