The Malaysian government’s planned sell-down of stakes in 33 Government Linked Companies (GLC) has kicked off with the float of MSM Malaysia – Malaysia’s leading sugar producer, in the first-ever privatisation by FELDA, the Malaysian government’s agri-holding business. Clifford Chance, Cleary Gottlieb, Albar & Partners and Kadir Andri & Partners were counsels to the deal.
“This was a landmark transaction for the government’s Economic Transformation Programme,” Clifford Chance lead partner Joan Janssen said. “There's a mix of companies awaiting privatization and listed companies where the Government will pare down its stake. These obviously have not all been made public. In the 10th Malaysia Plan, the Government did highlight some of the companies that would be privatised, in diverse industries such as bio-tech, pharma and aerospace.”
The Clifford Chance team advised the lead book runners CIMB and Maybank.
Cleary Gottlieb was lead counsel to the issuer with Albar & Partners its counsel on Malaysian law. Kadir Andri & Partners acted for the underwriters of the deal.
The IPO marks the first-ever listing by the Federal Land Development Authority (FELDA) of one of its companies. FELDA is also one of Malaysia's largest agri-based businesses. The public listing raised US$277m (MYR817m) and made a stellar debut on the Bursa Malaysia, rising 39 per cent on the first day of trading.
According to Janssen, the Malaysian government has set internal price targets and had indicated intentions to sell down its stakes when the trading price of the shares reach those targets.
"The Malaysian economy has been growing rapidly, and companies are seeking funding for expansion. In addition, the Government has been very active in supporting the growth of the capital markets, through the listing of state-owned businesses and reducing stakes in government-linked listed companies. We expect more deals to come over the next 18 months," Janssen said.
Similar landmark transactions have recently been announced on the Malaysian equity and debt market space.
Malaysia’s largest listing on the Bursa Malaysia thus far this year – the US$890m Bumi Armada IPO – was advised by Clifford Chance in a team led by Hong Kong-based Asia head of capital markets Crawford Brickley, who covered both US and English law aspects. Kadir Andri & Partners acted on behalf of the issuers with regards to Malaysian law advice. The underwriters of the deal were advised by a team led by partner Kevin Wong of Linklaters Allen & Gledhill as well as Zul Rafique & Partners on Malaysian law. "Our clients are considering new structures to support their fundraising, and look to established markets for new models," said Brickley.
Clifford Chance also advised on two significant bond issues in Malaysia. Equisar International, a company indirectly wholly-owned by the State Government of Sarawak, issued a triple-tranched bond valued at US$800m.
This was the third debt markets transaction on which Clifford Chance has advised the State Government of Sarawak, having previously advised on the US$350m guaranteed notes due 2026 issued by Sarawak Capital and the US$800m 5.5 guaranteed issuance previously.
Allen & Overy in Hong Kong led by Yvonne Siew is the other firm involved in the Equisar debt issuance.
Kadir Andri & Partners, Linklaters and Clifford Chance have all played a role in advising the largest dual-tranched global sovereign US dollar sukuk ever issued and the first global sovereign USD sukuk for 2011 – the US$2 billion dual-tranche sukukal-wakala transaction for the Government of Malaysia.
Clifford Chance advised CIMB, Citi, HSBC and Maybank as joint lead managers and bookrunners on the dual-tranched sukukal-wakala transaction. The dual-tranche consists of US$1.2 billion five year 2.991% sukuk-al-wakala certificates and US$800m 10 year 4.646% sukuk-al-wakala certificates. The Clifford Chance team was led by partner Stewart Dunlop and senior associate Gregory Man in Hong Kong, and supported by partners Qudeer Latif and Debashis Dey. US securities law advice was provided by partner Crawford Brickley and senior associate Thomas Kollar in Hong Kong.ALB
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