The Malaysian industrial to automotive conglomerate, UMW Holdings Bhd, is preparing plans to sell of 39% of its oil and gas production unit through an initial public offer. The said IPO is expected to fetch as much US$1 billion.

The public listing of shares comes during a time when IPOs and share sales in the Asian region are on the upswing. This IPO is expected to be one of the largest Malaysian offerings in 2013 after Malakoff, the independent power producer announced it was postponing its IPO to next year.

One of the reasons for the increasing demand was the political stability after the Malaysian general elections. It has given hope for companies to push through with their plans for the public listing. The list of IPOs is long, with AirAsia X Bhd projecting US$300 million for next month and utilities firm Ranhill Energy and Resources Bhd expecting to collect US$337 million for its IPO in June.

UMW would be offering 648.6 million shares or nearly 30% of its offshore, drilling and oil-field unit to institutional investors while the remaining 9% would be offered in the retail market. The proceeds would be utilized for payment of bank debts, capital expenditures and retained working capital.