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Logo of Phnom Penh Post newspaper Phnom Penh Post - PPSEZ sets timeline for delayed IPO launch

People walk past the entrance to the PPSEZ in 2013.
People walk past the entrance to the PPSEZ in 2013. Heng Chivoan

PPSEZ sets timeline for delayed IPO launch

After numerous delays, industrial park operator Phnom Penh Special Economic Zone announced yesterday that it had finalised a timeline for the launch of its upcoming initial public offering, and would kick off a five-day bookbuilding session starting on April 18 and hold a public roadshow two days later.

“This decision is a determining breakthrough in the long and arduous process of going public,” said Carie Phou, company secretary and disclosure officer of Phnom Penh SEZ Plc, in a press release.

The dates for the bookbuild and roadshow were cemented following approval from the Securities and Exchange Commission of Cambodia (SECC) on March 23, the release said.

Phnom Penh SEZ aims to offer upwards of 11.6 million new shares on the Cambodian Securities Exchange (CSX) when it officially goes public later this year, representing a 20 per cent stake of its enlarged issued share.

“The indicative price range for the bookbuilding is from $0.70 to $1 per new share,” Fong Nee Wai, the company’s CFO said. “The total market capitalisation for Phnom Penh SEZ would be approximately $40.5 to $57.88 million.”

Investors will be invited to participate in a bookbuild starting April 18 to determine the final share price. Fong said the IPO would not happen this month, but that the company was targeting sometime in May to go public.

Phnom Penh SEZ, which operates an industrial park just outside the capital with 76 primarily Japanese tenants, aims to be the fourth listed company on the CSX, and only firm that operates real estate and industrial services. The company generated some $23.4 million revenue in 2014, the last year reported.

Phnom Penh SEZ originally aimed to raise up to $15 million in an IPO to fund its development of a new special economic zone near the Thai border in Poipet. The company has since scaled back its target to between $8.1 million and $11.6 million gross proceeds once fully subscribed.

According to Nee Wai, the company chose to delay its IPO plans to give the capital market time to recover following the high-profile listing of state-run port operator Phnom Penh Autonomous Port (PPAP), which raised $5.2 million when it floated a 20-per cent stake last December.

“Otherwise it would be just too close for two companies to be publicly listed at the same period,” he said.

“We are aware that the Cambodia capital market is in an infant stage, therefore delaying the process has given us sufficient time to meet more potential investors.”

When asked whether the market had sufficiently opened up for a successful IPO just months after PPAP’s listing, Svay Hay, CEO of Acleda Securities, said “some say [Phnom Penh SEZ] has enough potential investors in hand, so the bookbuilding will be started as planned”.

He added that the upcoming IPO would result in more diversification on the stock exchange and that investors would be impressed with the additional options.

As for the expected share price, Hay said that the range was relatively low compared to recently listed companies. The issue share price of PPAP, by comparison, was 5,120 (about $1.28).

“The offering price shall be very attractive for public investors, while the deep-pocket and value-investing approach investors will join the bookbuilding,” Hay said, predicting that the combined influences of the two investor groups should result in an issue price somewhere below the mid-point of the price band.

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Comments

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Don Rennie's picture

Dear Kali,

The Cambodia Stock Exchange (CSX) is laughable and child's play by any standard. There are three issues to play with. Most children can play with three small toys.

Additionally, the currently listed companies trade at share values similar to a penny stock or Pink Sheet listing in America.

The NYSE and London Exchanges have been around for more than 200 years. The CSX has been around for a few years.

Why would ANYONE want to dabble in the CSX? Only the unsophisticated investor, and children at play would want to do so.

DR

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