Phnom Penh Autonomous Port (PPAP), the state enterprise that operates Cambodia’s second-largest port, successfully raised $5.2 million in an initial public offering that was more than 1.4 times oversubscribed, its underwriter said yesterday.
Subscription for 4.1 million shares, a 20 per cent stake, of the port operator was held November 12-17, with a share price of 5,120 riel ($1.26) set following a bookbuild last month. The company’s stock will be listed on the Cambodian Stock Exchange (CSX) in December.
“The oversubscription ratio of the combined amount – the book building plus retail subscription – is a little over 1.4 times,” said Han Kyung Tae, CEO of Yuanta Securities (Cambodia), the bookrunner and underwriter of the IPO.
The allocations to investors are only preliminary, he noted, as the Securities Exchange and Commission of Cambodia (SECC) requires that Cambodian nationals be given priority to 20 per cent of a total share offering, and must sign off on the results.
“Due to the special treatment for Cambodian nationals . . . the actual share allocations ratio will be a bit different,” Han said.
“The final numbers will be available next week after getting approvals.”
He also confirmed that listing date for PPAP’s stock on the CSX had been moved up by two days to December 9.
PPAP will be the third company, and second state-owned enterprise, to list on the fledgling stock exchange, which has struggled to attract investors since opening in 2011.
To sweeten its offering, the port operator has offered private investors a guaranteed 5 per cent dividend yield on the initial share price for the next five years.
PPAP holds exclusive licence to regulate and operate commercial river ports in and around Phnom Penh. It also generates income by leasing its assets, including land and buildings.
The company’s total revenue increased more than 14 per cent year-on-year during the first nine months of 2015 due to a surge in cargo traffic, according to an earnings report received by the Post. Gross revenue grew to $11.6 million in the first nine months of the year, compared with $10.1 million a year earlier, the report showed.
Cargo traffic through PPAP grew more than 6.3 per cent during the first nine months of the year, according to port data, which showed throughput at 108,760 TEUs during the period.
Svay Hay, president and CEO of Acleda Securities, said the high dividend yield policy and sustainable growth of PPAP made its share offering attractive to investors, as reflected in its oversubscription.
He said the port operator’s strong performance and latest profit figures should lead to further investment when its stock lists next month.
“Investors will enjoy and benefit from this growth, so they’ll invest more,” Hay said.