The Sihanoukville Autonomous Port (PAS) launched a book building process yesterday to determine what price to offer in an initial public offering (IPO), before it is listed on the Cambodia Securities Exchange late next month.
Once listed on the CSX, PAS will be the fifth company on the bourse joining Phnom Penh Special Economic Zone Plc., Phnom Penh Autonomous Port, Grand Twins International (Cambodia) Plc. and the Phnom Penh Water Supply Authority.
Book building is the process by which an underwriter attempts to determine the IPO price based on demand from institutional investors. An underwriter builds a book by accepting orders from fund managers, indicating the number of shares they desire and the price they are willing to pay.
So Eiichiro, chairman of SBI Royal Securities – the sole underwriter for PAS – said that the book building was “to test the waters and gain a greater insight into the investment appetite for the IPO.”
“SBI will be having roadshows in Bangkok, Singapore and Hong Kong to gauge the interests of potential investors,” said Eiichiro. Investors attending the roadshow could get a book building application and state their bidding share prices within a range of $0.88 to $1.29, he said.
“The book building process will end on May 2,” added Eiichiro. “The guaranteed annual dividend is at least five percent in the first three years for all public investors.”
PAS plans to issue 21.4 million shares, about 25 percent of the company’s authorised capital of $105 million, to raise its paid up share capital from $18.85 million to $27.74 million.
According to a brief issued to the CSX, the Cambodian government through the Ministry of Economy and Finance will control 75 percent of PAS after the IPO. Public investors, it added, will control 22.5 percent while PAS’s employee stock ownership program will own 2.5 percent.
PAS’s director-general Lou Kim Chhun said the IPO proceeds would be used to purchase land to build an inland container depot and a new container yard. The raised funds would also be used to buy new cranes, trucks and trailers to increase the capacity of the port, said Kim Chhun. “PAS is the country’s deep seaport connected to other ports in ASEAN. It can become a better regional hub when we have more support after the IPO,” he added.
Sou Socheat, director-general of the Securities and Exchanges Commission of Cambodia, said that the presence of new companies on the stock exchange reflected the development of the CSX and investor confidence in the bourse.
As of December 2016, PAS recorded a 1.86 percent increase in cargo shipments compared with the previous year, while tonnage rose 4.45 percent to 3.9 million tons, according to report from Ministry of Public Works and Transport. The state-owned enterprise recorded an estimated $7.8 million in profit for 2016, down from $9.4 million in 2015.