Malaysian telecoms group looks at London IPO

A Malaysian telecoms group has begun work on a potential flotation in London to further plans to build the first land-based fibre internet infrastructure between Singapore and Hong Kong.

Aries Telecom, based in Kuala Lumpur, has appointed Panmure Gordon and Mirabaud Securities to explore options for an initial public offering, raising about £100m, according to a person close to the process.

The flotation would probably be on Aim, London's junior stock market. Aries is owned by a holding company controlled by Zulizman Zainal Abidin, a Malaysian businessman.

One person with knowledge of the group said the choice to list in London was in part to raise the profile of the group, rather than just to raise equity.

"The company does not have a requirement for cash, but an IPO would allow it to shift from being a local, domestic operator into a regional player with an international investor base," he said.

A London listing could help with discussions to secure contracts and gain regulatory support as Aries seeks to build the first terrestrial internet connection between Singapore to Hong Kong via Malaysia, Thailand and Laos.

Fibre links across Asia typically run under the sea, including across a faultline that has threatened service interruptions, which is why Aries sees value in a terrestrial option.

A final decision on whether to proceed with a listing is expected during the summer. The company declined to comment.

Aries already operates a fibre network in Malaysia that provides high-bandwidth connectivity to 200 companies in the banking, technology, leisure and industrial sectors. It also provides fixed-line services to local mobile operators.

Investor appetite among European investors for next-generation infrastructure owners has been intense in recent months, with demand for flotations boosted by efforts to pump money into the system by central banks.

However, the run-up to the UK general election is expected by analysts to damp investor enthusiasm.

The existing Aries network spans peninsular Malaysia, covering all the large cities and towns. The company started as a distribution channel of customised and branded PCs, but in 2002 moved into telecommunications when it was awarded a regional wireless project.

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