Bidding for OCL shares set to begin by mid-Feb
Wednesday, 3 February 2010
Sheikh Shahariar Zaman
Bidding for shares of Ocean Containers Limited (OCL) is expected to begin by mid-February as the finance ministry has given its nod to the company to offload shares through direct listing.
The ministry also approved direct listing of Khulna Power Company Limited (KPCL).
"We received the finance ministry's letter Monday giving approval to direct listing of the companies and we hope to complete the formalities at the Securities and Exchange Commission within a week," SEC Chairman Ziaul Haque Khandakar told the FE.
The companies were allowed to go for direct listing as they applied before November 5, the day a finance ministry meeting decided not to allow any private company to offload shares through direct listing, he explained.
OCL has already received permission of the Chittagong Stock Exchange (CSE) to offload shares on the bourse.
The book-building software of the CSE is ready to start the trading, said its Chief Executive Officer Mohammed Abdullah Mamun.
In the initial stage of the bidding only institutional investors will participate, he said.
"The eligible institutional investors will participate in bidding, the duration of which will range from three-five days as is fixed by the issue manager, to set the cut-off price," he added.
Banks, financial institutions, insurance companies, brokers and merchant banks are the eligible institutional investors.
General investors will start bidding after two days of handover of OCL shares to institutional investors, Mr Mamun said.
The institutional investors will fix a cut-off price and this will be a reference price for the general investors, Mr Mamun said.
Chairman of OCL Aziz A Khan said that he was going to complete the whole process as soon as possible.
SAPL, the parent company of OCL, will buy about 10 acres of land in Chittagong to expand its capacity and also build a river port terminal on the bank of the Dhaleshawri in Narayanganj, he said. SAPL is also a listed company.
Under the direct listing, sponsors or owners get the sales proceeds, while in initial public offering a company receives the proceeds.
OCL has been allowed to sell 5.355 million shares to general investors and 1.1 million shares to institutional investors and the indicative price of each share is Tk 121.40, said an OCL official.
Earlier, to fix the indicative price of the OCL share, Platinum Securities, Eastland Insurance, National Housing, Continental Insurance and National Securities and Consultants submitted their bids and the average of their bids is the indicative price, he explained.
The face value of both the shares is Tk 10.
"The formalities for the OCL are almost complete and we will offload the shares as soon as possible," he said, adding, "KPCL is expected to complete the formalities within a month."
The formalities include arranging road-shows, figuring out an indicative price and approval of its prospectus by the SEC.
The direct listing regulation was introduced in 2006 and since then five state-owned enterprises (SoEs) and three private companies have offloaded shares under the through direct listing.
The SoEs are Power Grid Company, Dhaka Electric Supply Company, Jamuna Oil Company, Meghna Petroleum, Titas Gas Transmission and Distribution Company, and the private companies are ACI Formulation Limited, Shinepukur Ceramics Limited and Navana CNG Limited.
Bidding for shares of Ocean Containers Limited (OCL) is expected to begin by mid-February as the finance ministry has given its nod to the company to offload shares through direct listing.
The ministry also approved direct listing of Khulna Power Company Limited (KPCL).
"We received the finance ministry's letter Monday giving approval to direct listing of the companies and we hope to complete the formalities at the Securities and Exchange Commission within a week," SEC Chairman Ziaul Haque Khandakar told the FE.
The companies were allowed to go for direct listing as they applied before November 5, the day a finance ministry meeting decided not to allow any private company to offload shares through direct listing, he explained.
OCL has already received permission of the Chittagong Stock Exchange (CSE) to offload shares on the bourse.
The book-building software of the CSE is ready to start the trading, said its Chief Executive Officer Mohammed Abdullah Mamun.
In the initial stage of the bidding only institutional investors will participate, he said.
"The eligible institutional investors will participate in bidding, the duration of which will range from three-five days as is fixed by the issue manager, to set the cut-off price," he added.
Banks, financial institutions, insurance companies, brokers and merchant banks are the eligible institutional investors.
General investors will start bidding after two days of handover of OCL shares to institutional investors, Mr Mamun said.
The institutional investors will fix a cut-off price and this will be a reference price for the general investors, Mr Mamun said.
Chairman of OCL Aziz A Khan said that he was going to complete the whole process as soon as possible.
SAPL, the parent company of OCL, will buy about 10 acres of land in Chittagong to expand its capacity and also build a river port terminal on the bank of the Dhaleshawri in Narayanganj, he said. SAPL is also a listed company.
Under the direct listing, sponsors or owners get the sales proceeds, while in initial public offering a company receives the proceeds.
OCL has been allowed to sell 5.355 million shares to general investors and 1.1 million shares to institutional investors and the indicative price of each share is Tk 121.40, said an OCL official.
Earlier, to fix the indicative price of the OCL share, Platinum Securities, Eastland Insurance, National Housing, Continental Insurance and National Securities and Consultants submitted their bids and the average of their bids is the indicative price, he explained.
The face value of both the shares is Tk 10.
"The formalities for the OCL are almost complete and we will offload the shares as soon as possible," he said, adding, "KPCL is expected to complete the formalities within a month."
The formalities include arranging road-shows, figuring out an indicative price and approval of its prospectus by the SEC.
The direct listing regulation was introduced in 2006 and since then five state-owned enterprises (SoEs) and three private companies have offloaded shares under the through direct listing.
The SoEs are Power Grid Company, Dhaka Electric Supply Company, Jamuna Oil Company, Meghna Petroleum, Titas Gas Transmission and Distribution Company, and the private companies are ACI Formulation Limited, Shinepukur Ceramics Limited and Navana CNG Limited.