PHNOM PENH Autonomous Port (PPAP) began it roadshow yesterday to attract investors ahead of its initial public offering (IPO), saying the share price will range between $1.08 and $1.50 and that 35 percent of them had already been booked.
Hei Bavy, director general of the state-owned enterprise, said the plan is to initially sell 4 million shares, representing 20 percent of the company, and then a second tranche of 2 million shares by 2018.
“We will sell 10 percent of the shares to employees,” Mr. Bavy said, adding that 35 percent of the initial tranche of 4 million shares had already been booked.
Mr. Bavy added, however, that the IPO faced two major difficulties: a small market and a lack of knowledge among potential investors.
Noting that there are only two companies listed on the exchange, he said both had faced difficulties in attracting investors and that the port would likely face the same situation. A more robust awareness raising campaign would precede the port’s IPO, Mr. Bavy said.
Mr. Bavy added that the PPAP has been strengthening its management and finance to ensure transparency in order to gain confidence from potential investors. Dividends will also be paid to investors and this will equal 5 percent of the IPO within five years of listing, he said.
Mr. Bavy also said that the IPO would primarily target businesses that already use the port because they trust its management. These comprise both domestic and international partners, he said.
He said that the IPO would also have a positive effect on the two companies that are already listed on the bourse – Grand Twins International (Cambodia) Plc and Phnom Penh Water Supply Authority – as the port’s IPO would draw more investors to the Cambodia Securities Exchange.
Han Kyung Tae, CEO of Tong Yang Securities (Cambodia), an underwriter for PPAP, said the IPO is critical for the development of Cambodia’s capital market.
“We’re really impressed by the company’s earnings power,” Mr. Tae said. “It has achieved an incredible annual growth rate of 20 percent over the past five years in a reliably steady manner.
This IPO also provides a good investment opportunity because of the generous support of the government,” he added, referring to the government’s expansion plans for the port.
Mr. Tai said he invests in the Korean stock market because of its size and the strict requirements it has for companies to list on it. “It is very difficult, almost impossible, to find companies that meet the same [listing] criteria [in Cambodia],” he said, adding that PPAP is an exception.
Ros Seilava, Under Secretary of State at Ministry of Economy and Finance, said PPAP’s roadshow will be a good opportunity for potential investors to learn about the state-owned enterprise as well as the stock exchange. He said its IPO could help invigorate the economy as the funds raised will be used to expand its facilities.