DSE, NBR differ on pre-IPO placement
Tuesday, 23 September 2008
FE Report
The Dhaka Stock Exchange (DSE) Monday said that the stand of NBR on pre-IPO placement would discourage the mobile companies to go public.
DSE leaders expressed their fear when Chairman of National Board of Revenue (NBR) Abdul Mazid visited the country's prime bourse on the day and wanted to know their views on the Grameenphone's (GP) initial public offering.
The NBR said no company will get 10 per cent corporate tax benefit if it keeps pre-IPO or private placement.
DSE Senior Vice-President Saiful Islam said, "The decision will discourage other mobile companies to come in the capital market."
"Pre-IPO or private placement means that this type of shares will remain under lock-in for minimum one year," he said adding that after the period those shares should be offloaded, which will ultimately make immense contribution to the country's economy.
In the wake of the NBR directive, the country's largest mobile phone company is likely to halve its proposed initial public offering (IPO) size, sources said.
"The GP has, therefore, moved to reduce its IPO size to $150 million including pre-IPO placement from the proposed $300 million," a source said.
Of the total revised size of the GP IPO, $100 million might have been allotted for public, $15 million for micro credit borrower of GP, $10 million for GP staff and the rest $25 million for local financial institutions and mutual funds, the source said.
The cell phone operator filed its IPO application with the SEC in June this year, valuing the company at $3.00 billion, the largest in the country.
In its application, it planned to raise $150 million in a pre-IPO placement with international and local investors and a further $150 million form the country's stock market.
The GP, comprising Norway's Telenor and Bangladesh's Grameen Telecom, controls nearly 50 per cent of the country's 45 million-strong mobile phone market, and is the "benchmark corporate in Bangladesh".
Telenor owns 62 per cent of GP, while Grameen Telecom holds the rest 38 per cent stake.
The Dhaka Stock Exchange (DSE) Monday said that the stand of NBR on pre-IPO placement would discourage the mobile companies to go public.
DSE leaders expressed their fear when Chairman of National Board of Revenue (NBR) Abdul Mazid visited the country's prime bourse on the day and wanted to know their views on the Grameenphone's (GP) initial public offering.
The NBR said no company will get 10 per cent corporate tax benefit if it keeps pre-IPO or private placement.
DSE Senior Vice-President Saiful Islam said, "The decision will discourage other mobile companies to come in the capital market."
"Pre-IPO or private placement means that this type of shares will remain under lock-in for minimum one year," he said adding that after the period those shares should be offloaded, which will ultimately make immense contribution to the country's economy.
In the wake of the NBR directive, the country's largest mobile phone company is likely to halve its proposed initial public offering (IPO) size, sources said.
"The GP has, therefore, moved to reduce its IPO size to $150 million including pre-IPO placement from the proposed $300 million," a source said.
Of the total revised size of the GP IPO, $100 million might have been allotted for public, $15 million for micro credit borrower of GP, $10 million for GP staff and the rest $25 million for local financial institutions and mutual funds, the source said.
The cell phone operator filed its IPO application with the SEC in June this year, valuing the company at $3.00 billion, the largest in the country.
In its application, it planned to raise $150 million in a pre-IPO placement with international and local investors and a further $150 million form the country's stock market.
The GP, comprising Norway's Telenor and Bangladesh's Grameen Telecom, controls nearly 50 per cent of the country's 45 million-strong mobile phone market, and is the "benchmark corporate in Bangladesh".
Telenor owns 62 per cent of GP, while Grameen Telecom holds the rest 38 per cent stake.