Issue 27
 

More M’sian tech firms eye listing on ASX


More Malaysian companies, especially technology-related ones, are looking to the Australia Securities Exchange (ASX) to raise funds. 

ASX senior manager of listings business management James Posnett said there are 28 Malaysian and Singaporean companies listed on the ASX. 

“The performance of the technology companies on the ASX has been mixed,” he told StarBiz on the sidelines of the Wild Digital 2019 conference yesterday. 

He pointed out that initial public offerings (IPOs) on the ASX has been an alternative to the Series B round to obtain funding to move businesses forward. 

The market has it that there are two tech companies – iflix and PropertyGuru – mulling to list on the ASX. 

It was reported that iflix, a Kuala Lumpur-based video streaming startup, is targeting to float its shares at a valuation worth A$1bil. 

While both iflix and PropertyGuru’s operations are mainly in South-East Asia, Australia has been among the top choices for technology companies seeking to raise funds. 

Compared to other boards, such as the Nasdaq, the ASX is able to list companies that are at an early growth stage. 

The ASX has been putting in effort to get foreign companies to list on the ASX, including allowing companies with no profit records to be listed. 

“Lack of profitability is more a reflection of the stage the companies are in now,” Posnett said. 

He said there are a total of 280 international companies listed in Australia. 

“There have been 100 IPOs from the tech sector in the past five years on the ASX. They are using our market to raise capital,” said ASX business development manager for listings Kate Galpin. 

She was also one of the panel speakers at Wild Digital 2019 yesterday, speaking on “Is 2019 the Year of the IPO?”. 

According to the ASX website, on average, there were 125 new listings every year from 2014 to 2018, raising about A$10bil. 

It is the third-largest exchange in Asia and 10th largest exchange globally with a market capitalisation of A$2 trillion. 

The ASX has seen an increasing number of technology companies in the past years, from the United States, Israel and South-East Asia. 

Notably, iProperty and iCar – which were spun out of the Catcha Group – were listed on the ASX in 2007 and 2012, respectively. 

In his opening remarks at the conference, Patrick Grove, the co-founder and group CEO of Catcha Group, said the most successful companies are doing the same thing, but they are doing it faster, better and cheaper. 

"The problem is not to create something new, but to look around and see what the problems are, see how you can create solutions to change them.”. 

While doing that, he said, “Millennials are the market (to address), recognise that”.

 

From – The Star

 

Siam Commercial Bank to sell insurance unit to FWD for $3b


Thailand’s largest lender by assets, Siam Commercial Bank Pcl (SCB), is selling its life assurance business to Hong Kong-based insurer FWD Group for 92.7 billion baht (2.39 billion pounds), marking the largest insurance M&A deal in Southeast Asia. 

“Under this arrangement, SCB will distribute FWD‘s life insurance products to the bank’s customers in Thailand, leveraging the bank’s distribution channels for a period of 15 years,” both companies said in a joint statement on Monday. 

“SCB will receive a total deal amount of 92.7 billion baht along with additional payments common in bancassurance transactions over the course of the bancassurance partnership,” the statement said. The companies revived talks in March, two years after they failed to reach a deal over disagreements on valuation, Reuters has reported. 

Southeast Asia has emerged as a battleground for foreign insurers who are attracted by the region’s lower insurance penetration levels and faster growth rates for life insurance premiums than in their home markets. 

FWD, owned by tycoon Richard Li, has aggressively expanded its Asian footprint in recent years, mainly through acquisitions. The latest deal comes days after FWD agreed to buy the Hong Kong operations of U.S. insurer MetLife Inc.

 
From – Deal Street Asia
 


China’s AIIB looks to finance infra projects worth $10-12b annually

The Asian Infrastructure Investment Bank (AIIB) aims to finance infrastructure projects worth $10-12 billion annually over the coming years, and will maintain a prudent approach in investing in such deals, the bank’s vice president of policy and strategy said. 

The AIIB has 97 members and was launched in January 2016 to help meet Asia’s infrastructure needs. Since starting its operations, it has financed some $8 billion in projects, mostly in Asia. 

“We are gradually growing our investment, and that’s very little compared to the infrastructure finance needs,” Joachim von Amsberg told reporters on the sidelines of the World Economic Forum in the northeastern port city of Dalian. 

“It’s more important that we start with very high quality projects that really meet environmental and social standards and avoid corruption, rather than building up our investment as quickly as possible. So quality comes before quantity.”. 

The AIIB aims to finance projects worth about $4 billion this year, about 20 percent more than the $3.3 billion it financed in 2018, the bank has said. Von Amsberg said that the AIIB has been trying to avoid exacerbating debt risks in countries where it invests but still sees great potentials in Asia. “We are very careful about investing in countries that face possible risks of debt distress. 

We are well aware how hurtful that distress can be for countries,” he said. China’s Belt and Road programme has stoked foreign criticism that its opaque financing could lead to unsustainable debt and that it aims more to promote Chinese influence than development. 

The China-U.S. trade war is having little impact on the AIIB, which still welcomes the United States to join the bank as one of its new members, von Amsberg added.

From – Deal Street Asia
 


Pacific Equity Partners sets up company to buy Campbell’s international business

Pacific Equity Partners has set up a new company as part of its plans to buy the international business of U.S. food company Campbell Soup Co, The Australian Financial Review reported citing anonymous sources. 

The Australian private equity firm is getting ready to bid for Campbell Soup’s international brand portfolio, including local cookie brand Arnott’s, with a valuation of A$3 billion ($2.10 billion), the paper said. A spokesman for PEP declined to comment. 

Representatives from Campbell Soup did not immediately return an email seeking comment. Earlier this year, Campbell had said it expects to name buyers for the business by the end of its fiscal year in July. Bloomberg reported in March Campbell was in advanced talks about a deal with Mondelez International.

 
From – Deal Street Asia
 


GFG Alliance said to target $700m Australia IPO for steel unit

London-based conglomerate GFG Alliance is targeting to list parts of its Australian Liberty Steel business in a deal that could fetch about A$1 billion ($701 million), banking and industry sources close to the company told Reuters. 

That is a more modest target than indicated when Executive Chairman Sanjeev Gupta said GFG was looking to list some parts of the unit and could sell only a 40 percent stake, which according to sources would value it at about A$2.5 billion. 

But even at a smaller valuation, the listing would be the biggest on the Australian bourse since Viva Energy’s $4.86 billion IPO last July, Refinitiv data shows. 

GFG is targeting September to list parts of the unit, two other people with direct knowledge of the plans told Reuters, without giving any details on the possible size of the deal. 

Under the IPO plans, which could stretch to October, GFG will float the local distribution and recycling business of the steel unit, the two sources added. GFG had bought Liberty for A$700 million from Australian steel firm Arrium after it went into administration in 2017. 

The conglomerate is not expected to include the South Australian Whyalla steel making business and iron ore mines or any international business in the listing, the sources said. The business will be renamed Infrabuild and GFG plans to keep a large stake in the company, the size of which is still being finalised, said the sources, who declined to be identified as the plans are not yet public. 

While GFG did not respond to questions about plans for a Liberty Steel initial public offering, it said in a statement that as part of a broader business strategy, “capital market transactions are something that we may consider in the future”. 

Sources said that the British billionaire, Gupta, had initially targeted a valuation close to A$5 billion for the Australian unit, but that was now looking unlikely. 

The listing comes amid a slowdown in Australia’s housing market and construction industry, and it may struggle to attract robust investor appetite, the sources said, partly since the tired assets would need significant reinvestment. 

“This will be a challenging IPO,” said investment analyst James Eginton at Tribeca Investment Partners. “The big drawback is that crude steel manufacturing in Australia is a marginal business when you compare to the new facilities in China and much of Asia.” 

THE GROUP 

GFG is an umbrella group for the Gupta family’s investments in commodities trading, mining, metals manufacturing and power generation operations. 

It has grown rapidly from a metals trader, spending billions in recent years buying often troubled metals manufacturing facilities from Britain to India and investing in renewable energy assets, raising questions over funding for its rapid expansion. 

GFG subsidiary Liberty House currently operates the businesses slated for the Australian float, as well as seven European plants it acquired from ArcelorMittal earlier this year. 

JPMorgan, Deutsche Bank and Morgan Stanley are handling the Australian IPO, the sources said. Representatives for the banks declined to comment. 

GFG said in January it had appointed Credit Suisse to help it plan an IPO of Liberty Steel USA.

From – Deal Street Asia
 
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