TAN Sri Syed Mokhtar Albukhary’s plan to list MMC Port Holdings Bhd on Bursa Malaysia could be delayed by several months, if not longer, sources tell The Edge. The cause of the delay is not known.
One issue that cropped up is MMC Port’s high valuations. However, an industry player points out that the high valuation would be justifiable if MMC Port was looking at tariff hikes at the Johor and Penang ports. In July this year, the tariffs at Port Klang were raised by 30% by the Port Klang Authority, with the increase in phases over a three-year time frame. However, as at press time, The Edge cannot confirm if MMC Port is lobbying for a tariff increase at the Johor and Penang ports.
At press time, MMC Port chairman Tan Sri Che Khalib Mohamad Noh and CEO Datuk Azman Shah Mohd Yusof had not responded to the text messages sent by The Edge to verify the delay in the IPO.
When asked about the IPO being delayed, CIMB Investment Bank Bhd, the principal adviser of the IPO, says in an email response: “CIMB does not disclose or comment on specific names or clients.”
The investment bank is also the joint bookrunner, sole managing underwriter and joint underwriter.
The mega initial public offering (IPO) will involve only an offer for sale of 4.27 billion shares or a 30% stake by its sole shareholder MMC Corp Bhd, which was taken private in 2021. MMC Port does not intend to issue new shares to raise fresh capital via the listing exercise, according to the port operator’s draft prospectus.
News reports have it that MMC Corp wants to raise about US$2 billion (RM8.5 billion) from the share sale on Bursa next month. This values the port operator at almost US$7 billion (RM29.6 billion), compared with some analysts’ valuation of RM20 billion.
Analysts and fund managers whom The Edge spoke to questioned the rationale for not issuing new shares to raise fresh capital for port infrastructure development and port equipment such as cranes and stackers, which generally run into the millions of ringgit, without taking on more borrowings. This leaves investors concerned that the port operator might eventually need to raise capital expenditure after the IPO.
A total of 3.96 billion shares (nearly 93% of the offer) will be allocated to institutional investors and the remaining 286.1 million shares reserved as a retail offering for the port operator’s directors and key senior management, says the draft prospectus.
MMC Port’s key assets include a 70% stake in Port of Tanjung Pelepas Sdn Bhd (PTP), 100% of Penang Port Sdn Bhd, 100% of Johor Port Bhd and 100% of Northport (M) Bhd in Port Klang. As its ports are located along the Strait of Malacca, the IPO has even attracted investors from China, according to sources.
MMC Port’s rival, Westports Holdings Bhd., which operates a terminal in Port Klang about 40km from Northport, has a market capitalisation of RM19.4 billion and a price-earnings ratio of about 20 times, based on last Friday’s closing price of RM5.69.
Westports posted a net profit of RM897.98 million on revenue of RM2.34 billion for the financial year ended Dec 31, 2024. Its profit was higher than that of MMC Port even though it operates only a single terminal. In terms of throughput, Westports handled 11 million 20ft equivalent units (TEUs) in FY2024, while MMC Port’s total container handling at its main ports stood at 18.37 million TEUs.
In its draft prospectus, MMC Port says: “Our board is of the view that our company [at present] does not require additional equity funding for our business.” Interestingly, from FY2021 to FY2024, the port operator dished out RM1.56 billion in dividends to Syed
Mokhtar, according to filings with Companies Commission and MMC Port’s prospectus.
In the draft prospectus, the company says: “We declared and paid an interim dividend of RM30 million for FY2025 in March 2025. We further intend to declare a dividend of up to RM255 million for FY2025 in July 2025.”
This would nudge MMC Port’s dividend payments over the past five years to RM1.85 billion.
In contrast, prior to its privatisation, MMC Corp paid out RM230 million in dividends to all shareholders in FY2020, RM157.2 million in FY2019 and RM152.7 million in FY2018.
According to its draft prospectus, MMC Port’s cash and balances stood at RM347.3 million and RM1.53 billion in short-term investments, on the back of RM5.36 billion borrowings as at end-2024. The group said its operations generated RM2.02 billion in 2024.
Source: The Edge Malaysia