Andersen for GP's market-supportive disclosure policy in post-listing era
Saturday, 15 November 2008
A Z M Anas
Grameenphone should maintain a market-supportive disclosure policy, but steer clear of making any forecasts when the mobile telephony firm becomes a listed company, its outgoing chief executive has said.
"It (future disclosure) should be supportive of the capital market. We should not make forecasts," Mr. Anders Jensen observed.
"As a private company, we're transparent right now. We'll continue to maintain transparency when the company is listed. We should disclose (anything) that makes sense," Mr Jensen, who relinquished Monday his charges having served the company for one and a half years, told The Financial Express.
The country's largest mobile phone service operator announced Tuesday that it would raise US$125 million-of which $75 million will be hauled through Initial Public Offering (IPO) and $50 million via a private placement.
It also expressed the hope that the company would hit the stock markets in the first quarter of 2009.
The Swedish-born executive also said that the challenge on the part of Grameenphone is to make investors, especially retail ones, "understand the dynamics of the telecom industry" ahead of its planned listing.
"Most important is to make people, investors, particularly retail investors, to understand the dynamics of the telecom sector. It's all about communications and debate," he said as he referred to the responsibility of the company to educate future company investors.
At a penetration rate of 25 per cent, Bangladesh 's mobile telephony market is shared by six operators, with Grameenphone being the market leader.
Despite being a private company, Mr Jensen said it maintains a reasonably good transparency and discloses its profits and losses on a quarterly basis.
"We'll continue to do that when we're listed with Dhaka and Chittagong stock exchanges. As a listed company, Grameenphone should have a good dialogue with investors," he added.
A financial analyst said the challenge facing Grameenphone is to present before potential investors "a compelling case for growth in the telecom sector."
"The growth case of the company has to be solid," Ifty Islam, who heads the Dhaka-based equity firm Asian Tigers Capital, said.
With the majority stake controlled by the Nordic mobile phone operator Telenor, Grameenphone has cemented its position as the country's biggest operator over the years, serving an estimated 20.8 million subscribers.
But the company's average revenue per user (ARPU) continues to wane, thanks mainly to the fierce competition from other players.
Though the company racked up losses in the first and second quarters, it regained in profit in the third quarter (July-September) of 2008.
Bankers said, the company's borrowing from banks also remains as high as $140 million, a major chunk of which is costly and short-term borrowing.
The company, however, is seeking to turn around its balance sheet through medium-term financing and has drawn this week a number of institutional investors to chip in $60 million through its privately-placed bond.
"GP may have to raise market share. (But) where will your (GP's) future revenue growth come from? Is it 3G or GPRS?--it should be made clear," Mr Islam said.
Mr Islam, a former Citigroup senior executive, said if GP's IPO goes well, AKTEL, Banglalink and other mobile phone operators would follow the suit. "Even more companies will come to the (capital) market."
According to the company figures, Grameenphone's profits in the first nine months of this year hit Tk 45 billion while in the third quarter the profits stood at Tk 15 billion.
Grameenphone should maintain a market-supportive disclosure policy, but steer clear of making any forecasts when the mobile telephony firm becomes a listed company, its outgoing chief executive has said.
"It (future disclosure) should be supportive of the capital market. We should not make forecasts," Mr. Anders Jensen observed.
"As a private company, we're transparent right now. We'll continue to maintain transparency when the company is listed. We should disclose (anything) that makes sense," Mr Jensen, who relinquished Monday his charges having served the company for one and a half years, told The Financial Express.
The country's largest mobile phone service operator announced Tuesday that it would raise US$125 million-of which $75 million will be hauled through Initial Public Offering (IPO) and $50 million via a private placement.
It also expressed the hope that the company would hit the stock markets in the first quarter of 2009.
The Swedish-born executive also said that the challenge on the part of Grameenphone is to make investors, especially retail ones, "understand the dynamics of the telecom industry" ahead of its planned listing.
"Most important is to make people, investors, particularly retail investors, to understand the dynamics of the telecom sector. It's all about communications and debate," he said as he referred to the responsibility of the company to educate future company investors.
At a penetration rate of 25 per cent, Bangladesh 's mobile telephony market is shared by six operators, with Grameenphone being the market leader.
Despite being a private company, Mr Jensen said it maintains a reasonably good transparency and discloses its profits and losses on a quarterly basis.
"We'll continue to do that when we're listed with Dhaka and Chittagong stock exchanges. As a listed company, Grameenphone should have a good dialogue with investors," he added.
A financial analyst said the challenge facing Grameenphone is to present before potential investors "a compelling case for growth in the telecom sector."
"The growth case of the company has to be solid," Ifty Islam, who heads the Dhaka-based equity firm Asian Tigers Capital, said.
With the majority stake controlled by the Nordic mobile phone operator Telenor, Grameenphone has cemented its position as the country's biggest operator over the years, serving an estimated 20.8 million subscribers.
But the company's average revenue per user (ARPU) continues to wane, thanks mainly to the fierce competition from other players.
Though the company racked up losses in the first and second quarters, it regained in profit in the third quarter (July-September) of 2008.
Bankers said, the company's borrowing from banks also remains as high as $140 million, a major chunk of which is costly and short-term borrowing.
The company, however, is seeking to turn around its balance sheet through medium-term financing and has drawn this week a number of institutional investors to chip in $60 million through its privately-placed bond.
"GP may have to raise market share. (But) where will your (GP's) future revenue growth come from? Is it 3G or GPRS?--it should be made clear," Mr Islam said.
Mr Islam, a former Citigroup senior executive, said if GP's IPO goes well, AKTEL, Banglalink and other mobile phone operators would follow the suit. "Even more companies will come to the (capital) market."
According to the company figures, Grameenphone's profits in the first nine months of this year hit Tk 45 billion while in the third quarter the profits stood at Tk 15 billion.