The 375-500 million shares on offer in the initial public offering (IPO) of Singapore MRT (SMRT) will be priced in the range of S$0.54-S$0.62 each, raising S$250 million ($144 million) for the company, says a banker involved in the deal. The shares represent 25%-30% of the company and will be sold in two tranches, with 60% of the shares on offer to be placed with institutional investors and the remaining 40% reserved for domestic retail investors, he adds. Of the retail tranche, a quarter, or 10% of the shares being sold, are reserved for employees of SMRT.
The suggested price range represents 10-11 times SMRT's expected earnings for the year to March 2001. Marc Julienne, head trader for SG Securities in Singapore, says he anticipates the deal will get away without any problem, though the premium for those looking to stag the deal will be modest. "It will go down well, but it is not going to be a huge success" he says.
The roadshow for the deal kicks off today in Singapore and will take SMRT's management to Hong Kong, London, Edinburgh and New York betwen now and 13 July. The books for the institutional tranche of the offering will close on 14 July and pricing and allocations will be announced on 17 July. The retail offering will then take place and trading on the Stock Exchange of Singapore is expected to commence on 25 July.
"There is a window of opportunity prior to the summer. The pipeline of deals for the third and fourth quarters of 2000, be it transport or any other sector, is pretty crowded," says the banker. In the rail sector, the IPO of Hong Kong's MTR Corp, which is expected to raise HK$30 billion ($3.8 billion), is scheduled to take place by October. Elsewhere, Kuala Lumpur People Mover Rapid Transit System is looking to raise up to M$230 million ($61 million) via an IPO to help finance the construction of a 16 kilometre monorail system and Bangkok Mass Transit System (BTS) was hoping to raise as much as Bt9.6 billion ($244 million), also via an IPO, in the second half of this year.
BTS' IPO looks highly unlikely to take place in the near future, however, after the company missed a Bt1 billion interest payment on its borrowings at end-June. The company, which has suffered as a result of lower-than-expected passenger numbers, is currently in talks to reschedule repayments on its Bt35 billion borrowings.
