Thursday, August 16, 2012

Astro's IPO: How delisting and relisting may create additional RM6.5 billion from the market

Guess who owns Astro and Maxis. Both listings exercise strategies are cut from the same cloth. If one can remember, both went through a decently successful initial IPO (Maxis much more successful) and both were delisted. Then Maxis was relisted, Astro is about to be relisted.

What is that strategy? Originally, Astro prior to its delisting has operations in several countries but Malaysia is the only successful and significant one. Malaysia is the only one making money while everywhere else are just too volatile and bleeding cash as well as affect its P&L.

I have pulled out the Income Statement prior to its delisting in 2010 and compare it to the Proforma Income Statement which it is going to use for its prospectus this coming IPO. See the difference, prior to delisting, the marketing, distribution and administrative expenses was much higher. So was the share of losses from its associate companies (which are using equity method of accounting). The PAT was RM233 million for the accounts prior to its delisting. After the restructuring, we are seeing an account with a healthier PAT of RM614 million. And this structure is the one it is using for the new listing.

Which were the associate companies? Well, pretty much as below.

What did it do? The below is what I have cut out from its prospectus (which it submitted to SC). Astro basically reorganized its business by pulling out the profitable Malaysian operations and offer them to the people again. It also cuts off most of its associate companies above from the listing.

For the point of delisting, Ananda and several group (Khazanah included) were buying off minorities at RM8.5 billion valuation. Now, it is expecting a valuation of between RM11 billion to RM15 billion and I believe it is able to achieve at least RM12 billion judging from the more recent IPOs for large listings in FGV and IHH. If they achieve RM15 billion, it is going to be a cool RM6.5 billion that it has managed to pull from the market.

The question is, are all these illegal? It definitely is not. But just pure assets shuffling (for gains) which is just too much of unproductive work and thinking into it - and that is much we are all about nowadays - tonnes of hot air for nothing!
Do you see anything productive here?

BTW, as I see it again CIMB is involved. Guess who is always thinking of creating something out of nothing.

Other article on Astro's IPO:

Astro's IPO - Primetime Still?

1 comment:

Anonymous said...

simple. someone in the ruling governing party need money... for running election campaign. that's all. nothing new, reshuffle and inflate more. what else they can do