GP to seek IPO permission from SEC by month-end
FE Report | Thursday, 24 July 2008
The board of directors of Grameenphone, the largest mobile telephone company in Bangladesh, has approved the proposal for floating the initial public offering (IPO).
"A formal application for the IPO with expected gross proceeds of upto $150 million (around Tk 10.35 billion) and subsequent listing on Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) is expected to be filed with the Securities and Exchange Commission (SEC) and other concerned bodies by the end of this month (July)," a statement of GP said Wednesday.
GP would be the largest-ever IPO in the country and the first by a telecom company.
The statement said the board of directors of the company in its Monday's meeting also decided to conduct a pre-public offer of its shares with expected gross proceeds upto $150 million prior to the IPO.
"We are hopeful that GP's inclusion in the country's stock market will further highlight the potential of capital markets as an important engine of economic growth," said Mr Anders Jensen, the GP chief executive officer.
Citigroup Global Markets Bangladesh Private Ltd has been appointed as global coordinator, issue manager and lead underwriter of the GP IPO.
The GP submitted an IPO roadmap to the telecom regulator in December 2007 and hoped to offload its shares by the third quarter of 2008. Later, as part of its roadmap, Grameenphone appointed Citigroup Global Markets to assess its assets. Capital market analysts feel that Grameenphone's listing will have a positive impact on the market.
The company, which launched its operations in 1997, is 62 percent owned by Norway's Telenor, with the balance 38 percent being held by Grameen Telecom, part of the Grameen Group.
Sources said Grameenphone may adopt the book-building method for the proposed issue.
DSE, CSE and SEC are working jointly to introduce a book-building process in the market especially to handle big-ticket IPOs like that of Grameen.
The SEC and the two stock exchanges are working to introduce book-building method to ensure fair price in the initial public offerings (IPOs) for the big entrepreneurs who will go public.
"The present IPO pricing system has some distortions which do not encourage many sponsors to go public, that's why we are working to introduce book-building method," a market source said.
The book-building system is a modern method of selling equities when an investment firm seeks bids for a new issue at indicative prices. When the book is complete it offers prices and sells the lot in a single day.
Underwriters buy all the shares to be floated by public limited companies through competitive bidding procedure under the proposed system. Later the underwriters choose some brokers to put up those shares for selling to retail investors.
The issuers in the book-building system get their share prices from the underwriters who will be the highest bidder in the bidding process.
"A formal application for the IPO with expected gross proceeds of upto $150 million (around Tk 10.35 billion) and subsequent listing on Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) is expected to be filed with the Securities and Exchange Commission (SEC) and other concerned bodies by the end of this month (July)," a statement of GP said Wednesday.
GP would be the largest-ever IPO in the country and the first by a telecom company.
The statement said the board of directors of the company in its Monday's meeting also decided to conduct a pre-public offer of its shares with expected gross proceeds upto $150 million prior to the IPO.
"We are hopeful that GP's inclusion in the country's stock market will further highlight the potential of capital markets as an important engine of economic growth," said Mr Anders Jensen, the GP chief executive officer.
Citigroup Global Markets Bangladesh Private Ltd has been appointed as global coordinator, issue manager and lead underwriter of the GP IPO.
The GP submitted an IPO roadmap to the telecom regulator in December 2007 and hoped to offload its shares by the third quarter of 2008. Later, as part of its roadmap, Grameenphone appointed Citigroup Global Markets to assess its assets. Capital market analysts feel that Grameenphone's listing will have a positive impact on the market.
The company, which launched its operations in 1997, is 62 percent owned by Norway's Telenor, with the balance 38 percent being held by Grameen Telecom, part of the Grameen Group.
Sources said Grameenphone may adopt the book-building method for the proposed issue.
DSE, CSE and SEC are working jointly to introduce a book-building process in the market especially to handle big-ticket IPOs like that of Grameen.
The SEC and the two stock exchanges are working to introduce book-building method to ensure fair price in the initial public offerings (IPOs) for the big entrepreneurs who will go public.
"The present IPO pricing system has some distortions which do not encourage many sponsors to go public, that's why we are working to introduce book-building method," a market source said.
The book-building system is a modern method of selling equities when an investment firm seeks bids for a new issue at indicative prices. When the book is complete it offers prices and sells the lot in a single day.
Underwriters buy all the shares to be floated by public limited companies through competitive bidding procedure under the proposed system. Later the underwriters choose some brokers to put up those shares for selling to retail investors.
The issuers in the book-building system get their share prices from the underwriters who will be the highest bidder in the bidding process.