MOL Global eyes relisting in 2013

The listing of MOL Global, which Tan Sri Vincent Tan owns 88 per cent, is to raise funds for the company’s expansion plan.



MOL Global Group, majority owned by Tan Sri Vincent Tan, is in talks
with a few bankers on making a comeback to the local stock exchange by
as early as next year, more than five years after the company was taken
private by the tycoon.

“We
are preparing for a possible initial public offering in early 2013.
Talks are ongoing,” MOL Global chief executive officer Ganesh Kumar
Bangah told Business Times recently.

The listing of MOL Global,
which Tan and Ganesh own 88 per cent and 12 per cent, respectively, is
to raise funds for the company’s expansion plan.

MOL Global, which sells credits for making purchases in social games, currently owns 3.5 million Facebook shares.

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These shares came about in exchange for patents from the social
networking site Friendster, which was acquired by MOL two years ago.

“When
we first announced the Friendster acquisition, we received a number of
criticisms. People thought we were going to compete heads-on with
Facebook.

That was not true as we had a different plan all together. “We also saw Friendster’s true value,” said Ganesh.

The
Facebook shares own by MOL is worth more than RM310.8 million, based on
last Friday’s closing price of US$29.60 (RM94.75) a share.

Although
Facebook shares are currently trading at more than 20 per cent below
its IPO price of US$38 a share, the key decision MOL Global must make
will be on the timing to sell the shares.

Bloomberg data
revealed that 64 per cent of analysts covering Facebook stocks
recommended a "buy", three analysts recommeded a "hold" while two urged
a "sell".

Some analysts believe that Facebook shares can hit
more than US$48 a share. Should that happen, MOL's stake will be worth
more than RM512 million.

MOL Global is expected to almost
double its revenue to RM750 million for the financial year ending June
30, 2012, from RM374 million a year ago.

Ganesh said the growth in revenue is partly driven by the company's ability to turn around loss-making Friendster.

"When we took over, it was suffering a loss of US$10 million annually.
One of our first initiatives was to reduce the operating costs."

"We knew it would be suicidal to compete heads-on against Facebook.
Therefore, we re-positioned Friendster from a social networking site to
a social gaming portal.

"We believe Friendster will become profitable from next year."