Port gets closer to CSX listing

Chea Vannak / Khmer Times No Comments Share:
Sihanouk Autonomous Port will soon become the fifth company to be listed on the CSX. Supplied

Sihanoukville Autonomous Port (SAP) is closer to being listed on the Cambodia Securities Exchange (CSX) after a successful book building process to determine what price to offer in an initial public offering (IPO).
 
SBI Royal Securities – the sole underwriter for SAP – organised book building roadshows in Bangkok, Singapore and Hong Kong to gauge the interests of potential investors. The roadshows ended on May 2 and according to SBI, they were “to test the waters and gain a greater insight into the investment appetite for the IPO.”
 
According to SBI, 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.
 
“Large institutional investors participated in the book building. However, we also want to focus on small investors and also individual investors,” said Seng Chan Thoeun, head of corporate finance at SBI Royal Securities.
 
However, based on experience Mr. Chan Thoeun said it was the big investors who could determine the price of shares in the IPO.
 
“Currently, big investors are knowledgeable when it comes to IPOs and are willing to invest in large blocks of shares,” he said.
 
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.
 
SAP 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 Mr. Chan Thoeun, the result of final rate per share from book building was sent to the Securities and Exchanges Commission of Cambodia (SECC) after the close of the process yesterday.
 
He added that the SECC will announce today the final rate of shares to be offered to the public in the IPO.
 
According to a brief issued to the CSX by the SAP, the Cambodian government through the Ministry of Economy and Finance will control 75 percent of the port after the IPO. Public investors, it added, will control 22.5 percent while SAP’s employee stock ownership program will own 2.5 percent.
 
After the IPO, SAP plans to be listed on the CSX by the end of the month. It will then become 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.
 
SECC director general Sou Socheat told Khmer Times after book building roadshow last week that support from investors for the IPO depended on information provided by the company on its financial management, business performance and projected earnings.
 
“This information is vital if the company wants to have a successful IPO,” he said. The state-owned enterprise recorded an estimated $7.8 million in profits for 2016, down from $9.4 million in 2015.

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