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TJ KB AWSJ: Time dotCom Meleset Sekali
By Kapal Berita
16/2/2001 9:36 pm Fri
Terjemahan Ringkas dan Tokok Tambah
Sambutan kepada IPO Time dotCom (RM1.89 bilion) amat meleset sekali.
Cuma 25% sahaja saham direbut. Pelabur individu yang berminat
menyumbang 10% sahaja. 15% lagi dimilikki oleh pihak persendirian.
Selebihnya (75% = RM 1.4 bilion) akan diserap oleh 10 bank/penjamin
yang menapung jaminnya (underwriters).
Underwriter utama ialah
Sub-underwriter pula ialah:
Analis bimbang kegagalan Time dotCom akan mengheret dan
menenggelamkan bank (dengan kertas saham yang tidak bernilai
atau laku dan berguna). Medan saham digunakan untuk membayar
hutang, dan jika gagal ia akan menjadi NPL. Ini amat
membimbangkan kerana bank (dan ekonomi negara juga) akan
Time dotCom ditawarkan kerana Time Engineering sarat dengan
hutang sebanyak RM 5 Bilion [AFP].
Time Engineering dikuasai oleh:
Khazanah Harta membantu Time dengan membeli saham-sahamnya.
Empat tahun sudah ia rugi bertokok RM 2.17 bilion. [Star 12/02/2001]
Renong mungkin sudah mendapat wangnya tetapi underwriter akan
terjejas teruk. Mereka mungkin tidak sanggup menjamin IPO PLUS nanti.
November lepas UEM mengizinkan CEO Halim Saad menunggak 15 bulan
ikrarnya untuk membayar saham Renong dari UEM. Dia baru membayar
sebahagian pada hari Selasa, tetapi bayaran kedua ditangguhkan
dari Julai 14 kepada Oktober.
Halim Renong berhutang RM3.2 bilion kepada UEM dalam satu janji
selepas dia mengistiharkan UEM akan mewarisi hutang Renong
sebagai tukaran mendapat 33% saham Renong. Ini adalah satu bail-out
untuk melegakan Renong dengan menukar beban kepada UEM.
From The Asian Wall Street Journal
Time dotCom's Poor Showing Could Foreshadow Bad Times
By CRIS PRYSTAY
Staff Reporter of THE WALL STREET JOURNAL
KUALA LUMPUR, Malaysia -- Investors panned a big initial public
offering by telecommunications company Time dotCom Bhd., a development
that could set back corporate restructuring plans in Malaysia.
The Time dotCom IPO attracted buyers for just 25% of the stock offered
for sale by the company's listed parent, Time Engineering Bhd.,
according to a statement issued to the Kuala Lumpur Stock Exchange.
Excluding Time dotCom shares that were privately placed, individual
investors applied for just 10% of the 571.7 million shares offered,
analysts calculate, leaving the Malaysian banks that underwrote the
IPO with 429 million shares valued at 1.4 billion ringgit ($368.4
million) at the offer price of 3.30 ringgit per share.
The Time dotCom offering was the biggest to hit the Malaysian market
since Asia's 1997-98 financial crisis. Foreign investors, in
particular, have steered clear of Malaysia's market for months. But
the almost complete disinterest by local investors in the Time dotCom
offering suggests that they, too, have become skeptical about the
That could pose a threat to plans by Time Engineering's parent -- the
politically connected Renong Group -- to spin off another of its
investments, highway toll operator Projek Lebuhraya Utara-Selatan
Bhd., or PLUS. Renong, which has longtime links to Malaysia's dominant
political party, is counting on listing PLUS as the final step in the
debt-laden group's restructuring plans.
Analysts fear the failure of the Time dotCom IPO could also cast a
pall over other debt-workout plans engineered by Malaysia's national
debt-restructuring agency. That, in turn, could put pressure on
Malaysia's banking system. "I think this is definitely a damper as far
as future debt-restructuring plans go," said Loke See Ooi of Worldsec
Securities in Kuala Lumpur. "A lot of companies are very much
depending on asset value recovery to unravel their debt, and that's
going to be a lot harder now. The long-term implications to the
banking sector could be quite bad."
The Time dotCom IPO highlights the difficulties of corporate
restructuring in a slack market. Many of the restructuring plans
mapped out by Malaysian companies involve issuing new shares to retire
debt. "If the CDRC [the state-backed Corporate Debt Restructuring
Committee] isn't successful in their efforts, we might see a lot of
these debts reclassified as nonperforming loans. It's that wider
implication that people worry about," said a foreign analyst based in
Foreign and local investors have also been turned off by the
perception that corporate governance is poor in Malaysia and that some
companies benefit from political connections. Many indebted Malaysian
companies have avoided selling assets, opting instead to reshuffle
their holdings and take on new debt to keep their bankers at bay.
[Refer: AWSJ - Editor]
Few analysts had expected the Time dotCom IPO to fare well. The
3.30-ringgit offer price was first calculated a year ago, when telecom
stocks were hot and the Malaysian market was in an upbeat mode.
Independent analysts value Time dotCom at 1.50 ringgit to 2.30 ringgit
a share. The company owns an extensive fiber-optic network that it
says will serve as a platform for an array of existing and proposed
Internet and telecom services.
Time dotCom officials say bullish earnings projections for this year
and next warrant the offer price, but many analysts say those
projections are overblown. Critics contend that Time Engineering had
to stick to its initial offer price in order to raise enough money to
pay down its debt. Proceeds from the IPO, which raised 1.89 billion
ringgit, will be used to finance Time dotCom's operations and pay off
most of Time Engineering's debt.
Time dotCom shares will begin trading on Kuala Lumpur's stock exchange
in March. On Wednesday, Time Engineering's stock price fell 3.3%, or
seven sen, to 2.05 ringgit. Renong's stock declined 4.7%, or five sen,
to 1.02 ringgit.
"We had always expected weak public response, but thought government
funds would step in," said Chehan Perera, deputy head of research at
ABN Amro Asia Equity Research. "Instead, now it seems that the key
underwriters may have to take a severe hit."
There are 10 lead underwriters for the Time dotCom IPO, but analysts
say it's hard to assess the impact of the undersubscription on those
banks. Some of the Time dotCom stock has been sub-underwritten by
other banks, buffering the hit for any one institution. Indeed, some
analysts suggest that the IPO's poor showing could be mitigated by
Time Engineering's ability to now repay its debts with the proceeds.
"As far as Renong is concerned, the money they wanted to raise is
raised," said an analyst at a European brokerage firm. "That's money
that can now go back into the banking system."
Still, investors' snub of the Time dotCom IPO could cause another
Renong subsidiary -- United Engineers Malaysia Bhd., or UEM -- to
rethink or delay plans to list PLUS. UEM had hoped to raise about
three billion ringgit with the PLUS IPO, analysts say. "It's going to
be very difficult unless the underwriter is forced into the deal,"
said an analyst at a foreign securities firm.
In November, UEM granted Halim Saad, Renong's executive chairman and
controlling shareholder, a 15-month extension to honor a pledge to buy
back a large block of Renong shares from UEM. Tan Sri Halim made the
first payment of 100 million ringgit Tuesday, but requested that the
second payment, due July 14, be pushed back to October.
Tan Sri Halim owes about 3.2 billion ringgit for Renong shares he
agreed to purchase under an option he entered into three years ago to
mollify investors, after he had announced that UEM would take on debt
to buy a 33% stake in Renong. That move was widely seen as a bailout
of the ailing parent company at the expense of UEM.
Write to Cris Prystay at firstname.lastname@example.org
From The Star
Poor response to Time dotCom IPO
By KATHY FONG
Time dotCom Bhd's initial public offering (IPO), the largest ever in
Malaysia's history, has received poor response from the investing
public. Applications were received for only 142.86 million shares, or
25% of the total made available for public subscription.
Malaysian Issuing House Sdn Bhd (MIH), which is handling the
applications for the share issue, said in a statementthat the
remaining shares (428.83 million) not subscribed to would be taken up
by the joint lead underwriters and underwriters, who would have to pay
RM1.415bil cash for the unsubscribed portion.
The joint lead underwriters are Commerce International Merchant
Bankers Bhd, Perwira Affin Merchant Bank Bhd and Affin-UOB Securities
Sdn Bhd. The sub-underwriters are Amanah Merchant Bank Bhd, CIMB
Securities Sdn Bhd, K&N Kenanga Bhd, Arab-Malaysian Merchant Bank Bhd,
HLG Securities Sdn Bhd, RHB Sakura Merchant Bankers Bhd and Utama
Merchant Bank Bhd.
A total of 572 million Time dotCom shares were issued at RM3.30 apiece
for the IPO, which is part of the restructuring exercise of the Time
Of the total, 343 million shares were allocated for the public,
eligible employees of the Time Group and eligible dealers of Time
Wireless Sdn Bhd, and 144.54 million for entitled shareholders of Time
According to MIH, 14,558 applications for 29.738 million shares were
received in respect of the category of shares made available to the
Malaysian public, eligible employees and dealers. This represented a
subscription rate of 8.6%.
MIH said the share registrars had reported that application for 28.96
million shares had been received in respect of the restricted offer
for sale, for which 144.539 million shares had been allotted. The
take-up rate in this category was 20%.
"The placement of 84.15 million new ordinary shares and ordinary
shares to specific investors and a turnkey contractor of Time Wireless
have been successfully concluded,'' the statement said.
However, if this placement is excluded from the subscriptions
received, the take-up for Time dotCom's IPO would be only about 12%.
The subscription rate was very much below analysts' expectations.
"We had expected the IPO to be undersubscribed given the weak
sentiment, but we did not expect it to be that low.'' an analyst said.
"The news will be a dampener on market sentiment.''
IPO flop clouds Malaysia corporate restructuring drive: analysts
KUALA LUMPUR, Feb 14 (AFP) - The embarrassing failure of Malaysia's largest
initial public offering since 1995 will be a setback for future efforts to restructure
debt-laden companies, analysts said Wednesday.
The IPO by telecoms firm Time dotCom received applications for only a quarter of the
572 million shares offered at 3.30 ringgit, leaving underwriters to stump up for most of
the 1.87 billion ringgit (492 million dollars) targeted.
The public portion of the offer was less than nine percent subscribed, with 20 percent of
the restricted offer taken up. A share placement was fully taken up to give an overall
subscription rate of 25 percent.
Time dotCom, a unit of Time Engineering, manages the country's longest fibre-optic
Time Engineering, which has debts of close to five billion ringgit, is 47 percent owned by
debt-laden but politically well connected conglomerate Renong.
Most analysts said the share pricing was the problem, along with over-optimistic profit
forecasts by Time dotCom. Some said investors had a negative perception of the
Renong group as a whole.
Mercury Securities senior analyst Victor Wan said the undersubscription had been
widely expected but the 75 percent shortfall was an "unpleasant surprise.
"The undersubscription is a big dent to the country's efforts to restructure some of its
ailing companies as it shows the lack of faith in some of the proposals to turn around
debt-laden companies," he said.
Wan said Time dotCom's earnings forecast was "way, way too optimistic" with an
astronomical compounded annual growth rate of almost 130 percent projected for the
next five years.
"This is seen as unrealistic despite the group being debt-free after the listing, as the
earnings growth will be hampered by the slowing economy and the intense competition
in the sector," Wan told AFP.
He pegs the fair valuation of the share at around 2.50 ringgit.
Wan said falling interest in telecommunication and Internet stocks worldwide had also
hurt the IPO.
OSK Research also said the low take-up rate surprised the market.
"As a sign of the times, fund-raising exercises via the equity market are becoming
undersubscribed, choking off funding which means trouble again for financially
distressed companies and the banking system," it said in a daily report.
Sebastian Chang, research chief in Malaysia for Vickers Ballas, said local investors
were becoming more mature. "Gone are the days when they blindly apply for any IPO."
Chang said investors doubted the valuation of 3.30 and also doubted the management of
the company. He saw a fair valuation at 2.62 ringgit.
An institutional dealer with a local brokerage said the 25 percent take-up rate was the
worst for an IPO offering of its size.
"It's an embarrassment to those involved in the issue but it shows that the investing
public is now well-informed," the dealer added.
The failure of the IPO would have little impact on the Renong group debt restructuring
as the exercise was fully underwritten, analysts said.
"They have got the money. The difference now is that instead of getting it from the
public, they are getting it from a handful of underwriters," said Lucy Ng, research chief
at KAF Research.
A senior analyst said the underwriters -- mainly Commerce-Asset Holding and Affin
Holdings -- would now have to pay out about 1.4-1.5 billion ringgit for the unsubscribed
"The underwriters may farm out the unsubscribed portion, possibly to
government-related agencies," he said, adding that some government funds may have
to liquidate other shareholdings to take up Time dotCom shares.
"The broader market could suffer as a result of that," he added.
The KLSE composite index fell 4.60 points to finish at 714.54 in reaction to the poor IPO
Commerce-Asset closed down 0.35 ringgit at 8.50 while Affin was off 0.01 at 1.35.
Time Engineering slipped 0.07 to 2.05 and Renong eased 0.05 to 1.02.