Logo of Phnom Penh Post newspaper Phnom Penh Post - Port operator’s IPO share price set near high tide mark

Port operator’s IPO share price set near high tide mark

Content image - Phnom Penh Post
A truck prepares to receive shipping containers at the Sihanoukville Autonomous Port on the Kingdom’s coast. Heng Chivoan

Port operator’s IPO share price set near high tide mark

Sihanoukville Autonomous Port (SAP), the state enterprise that operates Cambodia’s principal seaport, announced a share price of 5,040 riel ($1.26) yesterday for its upcoming initial public offering following a bookbuilding exercise that garnered a strong response from institutional investors.

SAP priced its shares at the top end of the 3,520 riel to 5,180 riel ($0.88 to $1.29) range that it offered to investors participating in a six-day bookbuilding late last month. The pricing puts the port operator on track to raise $27 million for expansion in what stands to be the Kingdom’s largest-ever IPO.

SAP, which operates the country’s only deepsea port in Sihanoukville, is offering investors 21.4 million shares, about a 25 percent stake in the company, ahead of its listing on the Cambodian Securities Exchange (CSX) later this month.

Eiichiro So, chairman of SBI Royal Securities, the sole underwriter, book-runner and lead manager of the IPO, said the offering attracted large investors and was oversubscribed.

“The total bidding shares are 2.4 times higher than the total reserved shares for bookbuilding,” he said. “We believe this bookbuilding has been a success and shows the high expectations of investors.”

The share price gives Sihanoukville’s seaport operator an implied market capitalisation of $108 million, about four times the size of Phnom Penh’s river port operator, which raised $5.2 million in an IPO in late 2015.

SAP has said it will use the proceeds of the share offering to purchase an additional 52 hectares of land for construction of a new dry port and to expand the existing container yard. It will also put capital towards the purchase of heavy machinery and repayment of a $74 million soft loan from Japan International Cooperation Agency (JICA).

In December, SAP unveiled a massive $300 million master plan for expansion to be completed by 2022 that would increase its draft and triple its current container capacity.

JICA, which has been instrumental in the port’s development and financing, is set to become a strategic investor, taking 54 percent of the 21.4 million shares in the offering, according to disclosure documents.

Just over 25 percent of the shares were allocated to bookbuild investors, while 10.8 percent will be available to retail investors when public subscription opens on May 17.

The remaining 10 percent of the public shares will be allocated to SAP’s employee stock ownership program, giving its staff 2.5 percent ownership of the company.

More than 70 investors successfully bid in the bookbuilding, with two investors taking more than 1.5 million shares each. While So could not disclose details on the identities of these investors, he confirmed a strong showing from local investors.

“At this moment, we can say [the ratio of] successful investors from Cambodia is 66 percent and foreign investors is 34 percent,” he said.

SAP revenue increased to $51 million last year while net profit dipped to $7.8 million from $9.4 million a year earlier. The port saw a marked slowdown in container traffic growth last year, handling about 400,000 TEU, or standard twenty-equivalent units.

However, So remained confident that the last year’s lower than expected results would do little to dampen investor confidence.

“One of the [concerns] is capacity of container handling, and we expect they should solve this matter with the new cranes introduced early this year and the new investment via this IPO funding,” he said.

MOST VIEWED

  • Would you like fries with that? US burger chain makes Phnom Penh debut

    California-based The Habit Burger Grill restaurant chain is all set to serve up a delicious array of charbroiled burgers and sides at its newest international location in the centre of Phnom Penh. The Habit is “renowned for its award-winning Charburgers grilled over an open flame,

  • Angkor provides ‘valuable’ water storage

    The Apsara National Authority (ANA) has stored millions of cubic metres of water at reservoirs in the Angkor area after Cambodia experienced a series of rainstorms over the last few days. The storing of the water, besides serving temple conservation, will also be used to

  • Floods prompt evacuations in Kampong Speu

    Rain-induced floods and water flowing from Kampong Speu province have submerged the houses of 1,527 families living close to the Prek Thnot River in Spean Thma, Tien, Kong Noy and Roluos communes in Phnom Penh’s Dangkor district, according to data from local authorities. Spean Thma

  • Banteay Meanchey floods kill one more as death toll reaches 15

    As floodwaters start to recede in Pursat, Battambang and Pailin provinces and Phnom Penh, Banteay Meanchey continues to bear the brunt as one more person was killed on Monday, bringing the total number of flood-related deaths to 15 in the province this month. Banteay Meanchey provincial

  • Serving coffee with a side of robots

    The eye-catching glass building surrounded by greenery at the intersection of Streets 371 and 2002 in Phnom Penh’s Sen Sok district is more than just another coffee shop where you can while away a few hours. UrHobby House cafe is filled with robots and characters from

  • Cintri strike ends, workers’ contracts to be terminated

    CINTRI (Cambodia) Ltd rubbish collectors who have been on strike for the past 13 days agreed to return to work starting Wednesday evening after the company agreed to terminate their contracts at the end of January next year and provide seniority payments and other benefits to