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The Government will get Rs.5.65 billion proceeds through the Initial Public
Offering (IPO) of Pakistan Petroleum Limited (PPL) shares Dr. Abdul Hafeez
Shaikh Federal minister for Privatisation & Investment stated this while
addressing the first road show for the IPO of PPL shares here today.
Dr. Hafeez Shaikh said that the launching of PPL shares would mark a turning
point in the country's Privatisation Program. We want to sell the national
assets at right price and while benefiting the common man the efforts are made
to offer the shares on discounted price, he added and said that PPL having 33%
market share was a market leader and its profit would increase during the
current year as compare to the previous year figure of Rs.12.2 billion in view
of its performance.
He said that in line with the government's objective of 'Privatisation for the
People', preference in allocation would be given to the smallest applicants
for 500 shares for a total investment of Rs.27, 500/=, which would directly
benefit the small investors and would also help in broadening the shareholder
base and lend additional strength to the market. The listing of PPL will also
add significantly to market capitalization. It is expected that PPL would
become one of the highly traded stocks in the stock markets, he hoped.
The SECP and KSE have allowed Privatisation Commission (PC) to initiate
subscription for Sale of shares of Pakistan Petroleum Limited ('PPL') through
Lead Manger Elixir Securities Pakistan (Pvt) Ltd w.e.f July 19 to July 22,
2004 during banking hours at the Government's offer price of Rs.55/= per share
for the Initial Public Offer (IPO) The price for PPL IPO will be inclusive of
the transfer fee and thus no additional transfer fee would be charged to the
subscribers.
The government has approved the divestment of 15% shares of PPL through an
Offer for Sale of 10% (68.58 million) of the company's issued shares to the
general public with a green shoe option of additional 5% shares in case of
over subscription. Applications are being invited in multiples of 500 shares.
He further stated that through the privatisation process life was being
brought into the dead and sick units, which include Hyatt Regency Hotel
Building, Kohinoor Oil Mills, Rohri Cement, Faletti's Hotel and Thatta Cement,
which has doubled its production after privatisation.
To implement the Government's firm commitment to pass on the benefits of
privatisation to the common man, the Privatisation Commission has so far
benefited 197887 small applicants through the Public Offering of GoP
shareholding in National Bank of Pakistan (NBP), Oil & Gas Development Company
Limited (OGDCL) and Sui Southern Gas Company (SSGC), the Minister said.
He detailed that the amount realized through the sale of shares of earlier
offerings comes to Rs. 10.39 billion. NBP shares were sold to 33200 applicants
through an IPO and two Secondary Public Offerings for Rs. 1.7 billion. The
Offerings were oversubscribed and at the present average rate of Rs. 60/= per
share, the divested shares have shown an increase of 200 % in value and are
presently worth about Rs. 5.26 billion.
An amount of Rs. 6.88 billion was realized through the Initial Public Offering
of OGDCL shares from 97570 applicants. The IPO was 8 times oversubscribed and
at the present average price of Rs. 61/= per share, the divested shares have
shown an increase of 91 % in value and are worth about Rs. 13.12 billion. The
secondary Public Offering of SSGC shares fetched Rs.1.74 billion and was all
time highly oversubscribed by 15 times, setting new records. With the average
price of Rs. 34/= per share, the divested shares have shown an increase of 31%
and are presently valued at Rs.2.28 billion.
Earlier, Mr. Munsif Raza, MD, PPL while presenting the history and the
strategy of PPL informed that the GoP owns 93.4 % shares with net revenues of
Rs.12.2 billion, net income of Rs.4.2 billion as of June 2003 and total
reserves equivalent to 725 million barrels Oil. The company has 14 Blocks all
over the country, which include eight operative and six non operative while
PPL was also entering in international exploration in six different countries,
he said. Giving financial details of the company an official of PPL informed
that as of June 2003 the net sales stands at Rs.12 billion with Rs.20 billion
assets.
The CEO of CDC Mr. Hanif Shakir informed the investors about the benefits of
subscription through CDC and advised to open their individual accounts at the
Central Depository Company ('CDC') for receiving the shares early. People
opting for physical shares would need at least one extra month to be able to
sell their shares. CDC is an electric book entry system with the benefits of
instantaneous transfer of ownership, without stamp duty, no risk of damaged,
lost, forged or duplicate certificates. There were 13,500 CDC accounts having
3 billion shares valuing Rs.140 billion while market capitalization of shares
in CDS is 461.6 billion, he added and said that for opening of CDC account one
should visit the offices of CDC at Karachi, Lahore and Islamabad Stock
Exchanges with an annual fee of Rs.1500/= for individual account to
accommodate four members of the family and Rs.2000/= for corporate account.
The road show was followed by Q& A session.