Khazanah Nasional raised $451 million in an accelerated block of shares in Tenaga Nasional, the largest electricity distributor and utility company in Malaysia.
Books opened on Wednesday night under the joint leads of CIMB and Credit Suisse, with Malaysia’s state-owned investment fund seeking to offload 112 million shares, or approximately 2% of the enlarged share capital, in the power producer.
Shares were offered between RM14.40 to RM14.60 per unit, representing a 1.35% to 2.70% discount to the January 28 closing price of RM14.80, according to a term sheet seen by FinanceAsia. There is a 90-day lockup in place.
The sale reduced Khazanah’s stake to 29.64% from 31.64%, according to media reports.
Shares finally priced on Thursday morning at RM14.50, towards the top of the initial price range. One source close to the deal described the final book as well covered with a diverse mix of domestic, international long-only institutional investors and hedge funds.
He noted that allocations were skewed towards domestic and long-only funds, which accounted for 86% of the book. It was a top-heavy book, with the top ten investors receiving 84% of the deal.
Bankers lined up most of the demand during the wall-cross process. The source noted it was over two-thirds covered when books opened.
Tenaga reported net profit of RM2.35 trillion in the first quarter ending November, a 34% increase over the same prior year quarter, according to its earnings statement.
It has been a very profitable investment for the Malaysian state-owned investment fund. Last year, Khazanah received RM4.9 billion ($1.35 billion) in profits from its Tenaga holdings. Other home-runs included Alibaba, with Khazanah reaping $1 billion from Jack Ma’s e-commerce group. This brought the value of its portfolio to $40 billion, according to the state investment fund’s earnings statement.
Khazanah sold some of its stake in the electricity distributor and utility company in June 2013, raising $130 million in the process after selling 50 million shares at RM8.24 per unit, the middle of the indicative price range. Joint-bookrunners CIMB and Deutsche Bank ensured the deal was well covered before books opened, wall-crossing enough investors to have the deal three-quarters covered at launch.
More recently, Khazanah sold a $500 million stake in Tenaga in September through a zero-coupon exchangeable sukuk. The trade was a re-launch of a June deal led by JP Morgan and Nomura that Khazanah pulled after failing to get the price it wanted. In the successful attempt, CIMB, Deutsche Bank and Standard Chartered went for a seven-year maturity and four-year investor put.
