The state operator of Sihanoukville’s deep-sea port has pushed back the expected date of its initial public offering to February 2017 in order to give the company more time to resolve land titling and taxation issues, a company official said yesterday.
Ty Sakun, head of the IPO team for Sihanoukville Autonomous Port (SAP), said the company decided to delay the share offering after a meeting with Finance Minister Aun Pornmoniroth earlier this week to request help in resolving the remaining hurdles for going public.
SAP director Lou Kim Chhun had previously stated that SAP would list on the Cambodia Securities Exchange (CSX) by the end of 2016.
Sakun said during his meeting with Pornmoniroth and ministry officials, Chhun raised issues that have slowed down the listing process, including land titling and unpaid back taxes.
“We have some disagreement with authorities over tax payments and now the minister said he accepted our position and would help solve it,” he said. “The [tax] issue has slowed down our process and we have waited for a long time to clear it up.”
The state company argued that, based on past years, it should not have to pay taxes on its 15-hectare dry port near Phnom Penh, and that in 2014 it was slapped with two different tax payments: one for $85,382 and another for $975,000. Sokun said the minister agreed to let the company pay only the smaller of the two tax bills.
Additionally, the port is waiting on a small parcel of land within the port to be given a legal land title before it can register it as part of the company’s asset portfolio. The minister agreed that the land needs to be titled, but that the port can declare it as an asset later, Sokun said.
Sim Hoy Chhoung, CEO of Vtrust Appraisal, an asset evaluation company, said clearing up the titling issue and declaring the land as an asset would boost investor confidence in SAP when it lists on the stock market. However, with the tax difficulties now seemingly out of the way, the land issue can be resolved swiftly.
“The issue on land title is not a main problem. If the other issues are solved, the company will be listed sooner,” he said, adding that the port can still work on preparing its IPO in the meantime.
Lamun Soleil, director of the CSX’s market operation department, said the port operator had delayed its IPO many times already, but a push and support from the Finance Ministry should speed up its timeline for listing.
“SAP is the biggest port in Cambodia with a lot of growth potential, and would interest a lot of investors, particularly foreign ones,” he said. “Our stock market would become bigger and the daily trading volume would be higher [once it lists].”
Cargo throughput at SAP reached 2 million tonnes in the first half of 2016, an 8 per cent year-on-year increase. The port operator reported a net profit of about $45 million in 2015, its fourth consecutive year in the black.