Listings and IPOs on Bursa Malaysia for

Mining and Oil and Gas Companies

Feizal Mustapha
Executive Director, Advisory
BDO Malaysia

21 August 2013

Asian Mining and Energy Investment Forum 2013

Shangri-La Hotel, Kuala Lumpur

Mining and Oil & Gas Listings on Bursa Malaysia

Listed Mining Companies
Malaysia Smelting Corporation Bhd
On 23 July 2013, Kinsteel Bhd obtained exclusive rights
with KDYMM Sultan of Pahang to carry out mining
operation of all types of iron ore and other minerals at
Kuala Lipis

20

Perwaja Holdings Bhds mining venture is still pending

the final official award of iron ore mining concession in
Bukit Besi from the Terengganu state government
Previous listed mining companies that have changed their
core business:

Listed Oil & Gas Companies

Selangor Dredging Bhd

Kuchai Development Bhd

MMC Corporation Bhd

Petaling Tin Bhd

Exploration & Production

Support Services (engineering, procurement, offshore drilling, equipment etc)
24 companies
Shell Refining Company (Federation of Malaya) Bhd - one of the few listed in 1960s
On 29 July 2013, UMW Oil & Gas Corporation Bhd received approval to list
Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 2

Mining and Oil & Gas Listings on Bursa Malaysia

(Contd)
No. of New IPOs for Oil & Gas Related Companies
8
6

8
5

4
2

Source: Bloomberg
Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 3

No. of New IPOs

2

Dearth of Mining Companies?

There are many non-listed mining companies
Iron
Ore

Tin

Gold

Coal

Ibam Mining Sdn Bhd

Tajau Makmur Sdn Bhd Vetill Minerals Sdn Bhd

Terengganu Anshan Iron & Steel Sdn Bhd

HWG Tin Mining Sdn Bhd (part of Ho Wah Genting Bhd: Bursa) S.E.K. (M) Sdn Bhd
Rahman Hydraulic Tin Sdn Bhd (part of Malaysia Smelting Corporation Bhd: Bursa)
Raub Australian Gold Mining Sdn Bhd (part of Peninsular Gold Ltd: London AIM)
Segar Padu (M) Sdn Bhd

Specific Resources Sdn Bhd Pasir Emas Mining Sdn Bhd

Genesis Force Sdn Bhd

Luckyhill Mining Sdn Bhd

Copper Malaco Mining Sdn Bhd

* The above list is non-exhaustive
Source: http://malaysianminerals.com
Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 4

On the Other Hand, Listed Oil & Gas Companies

Exploration & Production

Support Services

20

Petronas Gas Bhd

Petronas Dagangan Bhd

Gas Malaysia Bhd

SapuraKencana Petroleum Bhd

Shell Refining Company

(Federation of Malaya) Bhd

Dialog Group Berhad

RM 438.5 - 41,395.1 mil

RM 58.6 - 28,492.3 mil

19.6 28.9

5.1 - 202.9

No. of companies*
Top 3 companies

Market
Capitalisation
P/E Ratio

* No. of companies are non-exhaustive

Source: Bloomberg

Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 5

Top Listed Oil & Gas Companies

5-year Share Price Performance
35

Share Price (RM)

30
25
20
15
10
5
0

As at 12/8/2013
Petronas Dagangan Bhd
RM28.68
Petronas Gas Berhad
RM20.92
Shell Refining Co.
(Federation of Malaya) Bhd
RM8.25
SapuraKencana
Petroleum Bhd
RM3.73
Gas Malaysia Bhd
RM3.361
Dialog Group Bhd
RM2.89

Source: Bloomberg
Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 6

Top Listed Oil & Gas Companies (Contd)

As at 12/8/2013
5-year PE Ratio Performance
Dialog Group Bhd
40

35.77

35

SapuraKencana
Petroleum Bhd
35.59

PE Ratio

30
25
20
15
10

Petronas Dagangan Bhd

34.39
Petronas Gas Berhad
28.91
Gas Malaysia Bhd
25.85

5
0

Source: Bloomberg
Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 7

Shell Refining Co.

(Federation of Malaya) Bhd
25.12 (31/12/2011)

Mid-Size Listed Oil & Gas Companies

5-year Share Price Performance
6

Share Price (RM)

As at 12/8/2013
Dayang Enterprise
Holdings Bhd
RM4.80

Uzma Berhad
RM4.00

Deleum Berhad
RM3.79

2
1
0

Source: Bloomberg
Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 8

Alam Maritime
Resources Bhd
RM1.49
Handal Resources Bhd
RM0.54

Mid-Size Listed Oil & Gas Companies (Contd)

5-year PE Ratio Performance
As at 12/8/2013
50
45
Handal Resources Bhd
28.42

PE Ratio

40
35

Dayang Enterprise
Holdings Bhd
18.23

30
25

Uzma Berhad
17.37

20
15

Alam Maritime
Resources Bhd
15.68

10
5
0

12/1/2008

12/1/2009

12/1/2010

12/1/2011

Source: Bloomberg
Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 9

12/1/2012

Deleum Berhad
13.77

Overview of Bursa Malaysia

KLCI Index
No. of sectors

14

No. of listed co.

(as at 12/8/13)

912

Market Capitalisation
(as at 12/8/13)
Top 5 largest market
capitalisation listed co.
(as at 12/8/13)

Consumer Products
Industrial Products
Construction
Trading / Services
Technology
Infrastructure
Project
Finance

Trading Breakdown

RM1.01 trillion

Maybank
CIMB
PBB
Axiata
Sime Darby

RM91
RM62
RM61
RM59
RM57

Hotel
Property
Plantation
Mining
REITs
Closed-end
Fund
SPAC

b
b
b
b
b

Local Retail
33.75%

Local
Institutional

23.50%

42.39%

KLCI Index 10-year Trend from 13 August 2003 to 12 August 2013

1,784.57

Source: Bloomberg and Market Statistic, Bursa Malaysia

Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 10

Foreign
Institutional
Foreign
Retail,

0.36%

Value Proposition of Bursa Malaysia for Mining and

Oil & Gas Companies
Benefits of Listing

Access to Capital /
Funds
Facilitate Growth
Enhance Credibility

Attractive valuations in PE
Exchange

Average
PE

No. of listed Oil

& Gas Companies

PE (Oil & Gas

Companies)

Bursa Malaysia

16.46

24

4.5 204.6

Singapore Exchange

13.01

35

2.8 76.6

Hong Kong Stock Exchange

10.39

33

1.2 47.1

Source: Bloomberg as at 16 Aug 2013

Ease of fund raising from local and foreign investors

Cost effective listing market

- Professional fees to IB and advisers
- Underwriting, placement & brokerage fees
- Regulatory fees

Enhance Profile and

Visibility

Incentive for
Employees
Widen Shareholder /
Investor Base

SC: Processing fee of RM80k + 0.05% of total market value of

listed securities (Max RM800k)
Bursa : Listing fees of 0.01% of total market value of listed
securities (Max RM200k for Main Market / RM20k for ACE
Market)

A liquid and well regulated secondary market

Bursa Malaysia listings open to domestic and international companies

Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 11

Routes to Listing on Bursa Malaysia

Listing on
Bursa Malaysia

Main
Market

IPO
Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 12

ACE
Market

RTO /
Back door
listing

Listing Requirements - Main Market

Quantitative

Qualitative

Profit Test

- Cumulative profit after tax (PAT) of 3

5 years of at least RM20 mil

- Most recent PAT of at least RM6 mil

Market Capitalisation Test
- Total market capitalisation of at least
RM500 mil
- Generated at least 1 year operating
revenue
Infrastructure Project Corporation Test
- Must have right to build & operate a
project of at least RM500 mil
- Government/State agency awarded
license with period of at least 15 years

Identifiable core business with healthy

growth prospect
Strong corporate governance,
particularly on BOD

Experienced management with

continuity of at least past 3 years

Satisfactory financial performance for

past 3 5 years

Sufficient working capital for at least

12 months

No conflict of interest

RTO / Back door listing subject to similar IPO requirements

Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 13

Listing Requirements - ACE Market

Quantitative

Qualitative

No minimum operating track

record or profit requirement

Identifiable core business with healthy

growth prospect

Sponsorship is required for at

least 3 years post listing

Strong corporate governance,

particularly on BOD

Sufficient working capital for at least

12 months

No conflict of interest

RTO / Back door listing subject to similar IPO requirements

Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 14

Special Purpose Acquisition Company (SPAC)

New Alternative Structure for Listing

A SPAC is a corporation formed by private individuals to

facilitate investments through an IPO on Main Market of Bursa
Malaysia

The proceeds from the IPO are used to buy one or more assets /
businesses / companies (defined as Qualifying Acquisition)
within a pre-determined period

Upon completion of the Qualifying Acquisition, the SPAC is

transformed from a cash company into an operating listed
company with an underlying business
As a SPAC, the focus is on the management team. SPAC investors essentially rely
on the competencies, reputation and past performance of the management team
as a forecast of how the SPAC might perform.

Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 15

Process and Requirements of SPAC

Listed on Main Market of Bursa Malaysia

SPAC
Create a
SPAC

Max of 36 months
from listing

Founder group of
individuals, with senior
management level of
business and public
company experience,
holding min 10% in the SPAC
Founders put in seed
capital, with investments by
initial investors
Min RM150m to be raised
from public through IPO,
90% of which must be put in
trust account

Operating Company
Qualifying
Acquisition
Management cannot
vote
75% approval threshold
by shareholders
Approval by SC
For more than one
acquisition, SPA of
each must be interconditional and
completed
simultaneously

Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 16

Normal listed
company

SPAC Listings so far

2 mining SPACs are awaiting consideration of SC

(i.e. Australaysia Resources & Minerals Bhd and
Terragali Resources Bhd)

Hibiscus Petroleum
Berhad

Cliq Energy Berhad

Sona Petroleum
Berhad

25 July 2011

10 April 2013

30 July 2013

IPO price

RM 0.75

RM 0.75

RM 0.50

Par value

RM 0.01

RM 0.01

RM 0.01

Funds raised

RM234 mil

RM364.4 mil

RM550 mil

12/8/13
Share Price
Warrant

1.48
0.965

Listing Date

Share &
Warrant
Movement
Share
Warrant

2.5
2
1.5
1
0.5
0

Completion of
QA on 18/4/12
~ RM2.01
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0

Approval of QA
on 10/2/12
~ RM1.46
Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 17

0.695
0.395

RM0.835 @
20/5/13
0.5
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0

0.46
0.325

Listing Process on Bursa Malaysia

PreApproval
Structuring
IPO &
Submission

T+12 weeks

PostApproval

Approval
Processing
the
Application

IPO

Prospectus
Launch

Registration
of
Prospectus

T+24 weeks

T+28 weeks

T+30 weeks

LISTING

T+32 weeks

Estimated 6 9 months
Appointment
of IB and
advisers

Public
exposure of
Prospectus

Preparation of
valuation
report

Addressing
queries from
SC & Bursa

Drafting &
submission of
Prospectus

Evaluating &
approval by SC
& Bursa

Updating of
Prospectus

Prospectus
launch

Allotment of
shares

Registration &
lodgement of
Prospectus

Road shows
&
bookbuilding
exercise

Trading
commences

Pre-marketing
commences

Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 18

How BDO can help

IPO
Grooming
Advisory &
Diagnostic
Tax Advisory
&
Structuring

BDO

Coordinating
with IB and
advisers

Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies
Page 19

Project
Advisory &
Structuring

Reporting
Accountants

THANK YOU
Feizal Mustapha

Executive Director, Advisory

12th Floor, Menara Uni.Asia
1008 Jalan Sultan Ismail
Kuala Lumpur 50250
MALAYSIA
Email
Direct
Fax

: feizal@bdo.my
: +603 2616 2928
: +603 2616 2829