Malaysia's Medini Iskandar plans $1b IPO in 2014: Sources

Medini Iskandar, developer for the 903-ha Iskandar region in Johor, Malaysia, plans to list on the local stock exchange in the first half of 2014 in a deal that could raise up to US$800 million (S$1.01 billion), according to sources. -- PHOTO: ISKAND
Medini Iskandar, developer for the 903-ha Iskandar region in Johor, Malaysia, plans to list on the local stock exchange in the first half of 2014 in a deal that could raise up to US$800 million (S$1.01 billion), according to sources. -- PHOTO: ISKANDAR 

KUALA LUMPUR (REUTERS) - Medini Iskandar Malaysia, an urban township property developer, plans to list on the local stock exchange in the first half of 2014 in a deal that could raise up to US$800 million (S$1.01 billion), two sources familiar with the matter told Reuters.

The initial public offering (IPO) would see the company joining a handful of listed "master developers" in Asia, such as the Philippines' Ayala Corp and Japan's Mitsubishi Estate Co Ltd.

Those companies typically develop a region and have a number of property companies in their stable.

"Banks are pitching for the deal," said one of the sources, adding that the plan was still in a preliminary stage. The sources declined to be named because the matter was private.

A representative at Medini Iskandar was not immediately available to comment.

Medini Iskandar, which counts state owned Iskandar Investment Bhd, Dubai's United World Infrastructure and Japan's Mitsui & Co Ltd as shareholders, is the developer for 903 hectares of land earmarked as Malaysia's largest single urban development to date in Iskandar, in the southern Malaysian state of Johor, near Singapore.

The site, which will be developed into an urban township consisting of luxury condominiums, hotels, hospitals and education centres, has an expected gross development value of more than 68 billion ringgit (S$26.8 billion) over the 20-year development plan, according to Medini's official website.

Malaysia's state investment arm Khazanah Nasional Bhd holds a 60 per cent equity stake in Iskandar Investment, while the Employees Provident Fund and Kumpulan Prasarana Rakyat Johor Bhd each own 20 per cent.

Malaysia has seen a pick-up in IPOs and secondary share offerings after a lull amid political uncertainty ahead of a general election in May.

Long-haul carrier AirAsia X Bhd raised US$310 million in an IPO earlier this month. Westports Malaysia Sdn Bhd, operator of the country's busiest port, is expected to list in October this year in a deal that will raise up to US$500 million.

But 2013 has not been all smooth sailing for the Malaysian IPO market, which was the biggest in Asia-Pacific excluding Japan last year. Malaysian construction and power firm MMC Corporation Bhd announced in May that it was postponing the US$1 billion share listing of its Malakoff power arm until the first half of 2014, citing delays caused by maintenance work. That would have been the country's largest IPO this year.

Ranhill Energy & Resources Bhd on Friday cancelled its US$237 million IPO, which had been derailed after state oil firm Petroliam Nasional Bhd (Petronas) suspended the licence of an affiliate company earlier this month.

And another developer, Iskandar Waterfront Holdings, may see its US$300 million listing delayed to next year.

The company was initially expected to list in the fourth quarter of this year.

"They are still finalising the injection of more assets into the company," said a source, adding that the process could take a while in view of the huge assets the company has and strict procedures for regulatory approval.