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Since the beginning of this year, several major Malaysian companies have become dual-listed companies. What is dual-listing and what are its advantages and shortcomings?
DUAL-LISTED companies (DLCs) are also known as Siamese-twin companies. DLC structures are effectively mergers in which companies listed on different bourses agree to combine their operations and cash flows and make similar dividend payments to shareholders in both companies, while retaining separate identities and registries.
In this respect, dual-listing is different from cross-listing. Whereas a dual-listing involves the quasi merger of two separate entities, a cross- listing occurs when an individual company establishes a secondary listing on a foreign stock exchange.
In the first five months of this year, several major Malaysian companies have become DLCs. Even the Malaysian stock exchange operator Bursa Malaysia Bhd is reportedly in dual-listing talks with Jakarta's stock exchange. Bursa, however, said on May 30 that `no formal plan or agreement has taken place' (yet) between the two parties.
Budget airlines AirAsia Bhd, controlled by millionaire Datuk Tony Fernandes, is also considering a dual-listing in the United States or Europe in the future. RHB Research equity analyst Lim Chee Sing says other Malaysian companies with potential for dual-listing include Wah Seong Corp Bhd, Tanjong Plc, UMW, Gcorp and IJM Bhd.
Earlier this year, Sin Chew Media Corp Bhd, controlled by Sarawak billionaire Tan Sri Tiong Hiew King, become the first company to have a primary dual-listing in both Malaysia and Hong Kong. This was made possible by the merger of Sin Chew with Hong Kong-listed Ming Pao Enterprise Corp Ltd, a global company in the Chinese print media which is also controlled by Tiong.
Another Chinese print media group, Nanyang Press Holdings Bhd, controlled by Huaren Management Sdn Bhd, also participated in the merger. Sin Chew and Nanyang will subsequently be de-listed from Bursa Malaysia but their shareholders will own shares in Ming Pao, which eventually will be listed in Malaysia.
Ming Pao is the owner of Ming Pao Daily News and Ming Pao Weekly in Hong Kong, Toronto, Vancouver, New York and San Francisco. Sin Chew is the...