Controlling shareholders sell $136 million of Cleanaway shares

The Taiwan deal comes on the back of reverse inquiries and follows a block trade in Malaysia Airports and a follow-on by CapitaMall Trust mid-last week.
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Cleaning up: Cleanaway's controlling family raises $136 million
<div style="text-align: left;"> Cleaning up: Cleanaway's controlling family raises $136 million </div>

The controlling shareholders of Cleanaway, a Taiwanese company specialising in treatment and disposal of hazardous and non-hazardous industrial waste as well as the cleaning up of contaminated sites, have sold NT$4 billion ($136 million) worth of shares in the company.

It was the first time that chairman Yang Ching-Hsiang and his family reduced their stake since the company listed on the Taiwan Stock Exchange in October 2011. According to sources, the deal was prompted by reverse inquiries from four separate investors and meant that the majority of the placement was covered before launch.

This may explain why Goldman Sachs, which acted as the sole bookrunner, felt comfortable to launch the deal on Friday — a day when investor activity was thinner than usual due to the Thanksgiving holiday in the US the day before. However, Asia also saw two equity placements on Wednesday last week and one small block on Thursday which all received good demand, so perhaps the US holiday didn’t really play as big a role as bankers seemed to suggest a few days before.

The sellers offered 20 million shares, which accounted for 18.4% of the existing share capital and about 50 days of trading volume. They were marketed in a range between NT$200 and NT$205, which represented a discount of 3.1% to 5.4% versus the latest closing price of NT$211.50.

However, the investors responsible for the reverse inquiries were said to be in at NT$200, making it highly unlikely that the price would be fixed any higher than that. And indeed, the final price was set at the bottom of the range for a 5.4% discount.

When the order books closed at 5.15pm Hong Kong time, after just under four hours of bookbuilding, about 30 investors had submitted orders, one source said. About 75% of the demand came from long-only investors and about 70% from international accounts. The 30% of the order amount that was generated in Taiwan was concentrated on a small number of clients, he said.

The stock, which currently is covered only by a handful of Taiwan brokerages, has gained about 21% since its IPO on the TWSE in October last year, after about 12 months of trading on the emerging board. In the past six months it has hovered in a range between NT$190 and NT$215.

Among the other placements last week, Malaysian investment company Khazanah raised M$538 million ($190 million) from the sale of an 8.8% stake in Malaysia Airports Holdings. The deal was upsized in full to 106 million shares from 85 million at launch, but priced at the bottom of the range for a 1.8% discount to Wednesday’s closing price of M$5.60 and a 3.9% discount to the two-day volume-weighted average price of M$5.72.

The shares were offered at a price between M$5.50 and M$5.60, with the top end of the range being equal to the latest close. A source noted that there was strong demand from both foreign and domestic institutions.

The sale will reduce Khazanah’s stake in the airport operator to about 40.3% from 49.1%. Credit Suisse and OSK Investment Bank were joint bookrunners.

Also on Wednesday last week, Singapore-listed CapitaMall Trust raised S$250 million ($204 million) from a follow-on offering arranged by J.P. Morgan. This deal too was upsized, to 125 million units from 100.503 million units at launch, after being oversubscribed. The final size accounted for 3.8% of the existing share capital.

The units were offered at a price between S$1.99 and S$2.07, which represented a discount of 1.9% to 5.7% versus the latest close of S$2.11, or a 1.2% to 5% discount versus the closing price adjusted for accumulated dividends of 1.55 Singapore cents per unit that the new investors won’t get access to.

The price was fixed close to the bottom at S$2 for a 5.2% discount to the close or a 4.5% discount to the adjusted close of S$2.095.

In a statement, CapitaMall Trust said the placement attracted more than 60 existing and new institutional investors from Asia, the US and Europe.

CapitaMall Trust, which focuses on retail properties and is the largest real estate investment trust (Reit) in Singapore in terms of total assets, said it will use the proceeds to finance capital expenditure and asset enhancement initiatives at its properties, and to refinance existing debt. It will be locked-up for 180 days following the sale.

“This exercise is consistent with the recent refinancing to extend our overall debt maturity profile by putting in place more permanent source of capital,” Wilson Tan, CEO of the company managing the Reit, was quoted as saying in the statement. “This equity placement also allows us to optimise our capital structure, thereby increasing our debt headroom and putting us into a better position to embark on future opportunities to boost unitholders’ returns,” he added.

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