Invest Stock

The company is seeking to raise at least US$2.5 billion (S$3.2 billion), vying to rank among the top IPOs in the world this year after Facebook raised as much as US$18.4 billion and a planned US$3-billion listing by Malaysia's Felda Global Ventures Holding.

The IPO is set to be priced before the end of June after the company and its bankers meet with investors and fund managers to gauge demand for the IPO, said the sources, who asked not to be named because they were not authorised to speak publicly on the matter.

Formula One would join British luxury jeweler Graff Diamonds in braving equity markets despite a slump in global stocks. Graff started taking orders yesterday from institutional investors for its up-to-US$1 billion Hong Kong IPO.

IPOs had their worst start in about four years in the Asia-Pacific region with overall equity market activity down about a fifth from last year as investors fretted at buying new shares because of falling markets.

MSCI's index for Asia ex-Japan fell about 10.4 per cent over the past month on concerns over slower growth in China and the fallout from Europe's debt crisis. A source close to the Formula One deal said on May 12 the IPO could be delayed because of the ongoing market jitters.

Formula One could have its B+ long-term debt ratings lifted one notch after the IPO because of an expected improvement in its debt profile, Standard & Poor's said in a May 15 report when it put the company on "positive" watch.

The decision "mainly reflects our view that after the IPO in the next two to three years, Formula One's adjusted leverage is likely to lessen significantly and durably and that private equity sponsors will exit Formula One's capital in the medium term", S&P said in the report.

Formula One's IPO approval by the Singapore exchange was reported earlier by Bloomberg.

Formula One, which holds 20 races around the world and has more than 500 million television viewers, is controlled by private equity firm CVC Capital Partners, which has a 63.4 per cent stake.

CVC plans to reduce its stake as part of the IPO along with other shareholders in Formula One, the source added.

Formula One earlier this month unveiled a US$1.8-billion refinancing package to help lay the groundwork for the IPO.

Goldman Sachs, Morgan Stanley and UBS were hired to lead the IPO. Spain's Banco Santander, Singapore's DBS Group and Malaysia's CIMB will also act as joint bookrunners on the deal. REUTERS

Asia’s leading agribusiness group, Wilmar International, posted a 33.8 percent decrease in net profit to US$255.9 million despite a 9.8 percent gain in revenue to US$10.5 billion for its first quarter ended 31 March 2012. Despite the strong earnings growth from palm & laurics, consumer products, plantations & palm oil mills, earnings were dragged under by lower oilseeds & grains margins due to the difficult operating environment in China. Similarly, Wilmar’s associates also recorded lower contributions. Nevertheless, the strong volume growth achieved across all its key business segments reflected strong consumption growth and market share gains. As at 31 March 2012, total assets stood at US$39.95 billion while shareholders’ funds grew to US$13.54 billion. Net gearing ratio increased to 1.08x from 0.97x as at 31 December 2011 due to higher net loans and borrowings to meet Wilmar’s working capital and expansion needs.

Significance: Kuok Khoon Hong, Chairman and CEO of Wilmar expects the company’s key business segments, especially palm & laurics, to continue to perform satisfactorily for the rest of the year although oilseeds crushing margin in China is expected to remain challenging due to excess capacity.