The Energy Chamber of T&T fully supports the policy of offering shares in state-owned energy sector companies to the investing public in T&T.
On Monday, the National Gas Company (NGC) launched its initial public offering (IPO) for T&TNGL, which is a holding company for a 39 per cent stake in Phoenix Park Gas Processors. According to a statement from the Energy Chamber on Tuesday it believes that this IPO will assist in deepening the local capital market as well as contribute to building of the economy.
The Energy Chamber said: “Broadening local capital markets and increasing opportunities for investment are important components of overall economic development for the country. Based on the positive experiences of companies such as Ecopetrol in Colombia, the Energy Chamber also believes offering shares in state-owned companies in the energy sector can strengthen their corporate governance and therefore improve their overall financial performance.”
NGC launched the IPO on Monday at the Hyatt Regency Hotel and if the offer is fully subscribed it could bring in as much $1.5 billion for the company.
NGC is selling 75.85 million shares to T&T individuals and companies at $20 a shares.
President of NGC, Indar Maharaj said the company will not lose money as a result of the sale.
Finance Minister Larry Howai, who spoke at the launch, said the IPO is in keeping with the Government’s policy of expanding the capital markets.
Howai said safeguards are in place for this IPO and what happened with the First Citizens Bank IPO will not happen again.
He said external auditors are being used to ensure the process goes smoothly.
The prospectus shows that NGC is offering 49 per cent of its total ownership in Phoenix Park and the offer shall comprise of 75,852,000 of NGC’s Class B shares which will be offered for sale at an offer price of $20 per share.
T&TNGL’s issued shares consist of 154,800,000 total shares, comprising 38,700,000 Class A shares and 116,100,000 Class B shares.
At the end of the IPO process, this would give NGC an interest of 51 per cent in T&TNGL and the public an interest of 49 per cent.
According to the prospectus, the Government has outlined a capital market policy, which seeks to widen and deepen the domestic capital market as a means of expanding the market economy through promoting efficiency by exposing businesses and services to the greatest possible competition, to the benefit of the customer.
The prospectus also outlined that the IPO will spread ownership as widely as possible among the population thereby giving citizens a direct stake in industrial success.
The securities are being allocated to:
• 60 per cent are allocated for the employees of T&T NGL Ltd, Phoenix Park Gas Processors Ltd, the National Gas Company Ltd, NGC CNG Company Ltd, La Bea Industrial Development Company Ltd and the National Energy Corporation of T&T Ltd and the individual investors who are nationals of T&T
• 10 per cent are allocated for mutual funds including the T&T Unit Trust Corporation (UTC)
• 10 per cent are allocated for the National Insurance Board (NIB)
• 15 per cent are allocated for the registered pension and other trust funds, credit unions and cooperatives in T&T
• 5 per cent are allocated for other companies registered in T&T
Ravi Suryadevara, president of AmCham T&T, told the Business Guardian on Tuesday that the Government had declared its intent to divest these shares since it paid ConocoPhillips US$600 million for its 39 per cent stake in Phoenix Park Gas Processors Ltd in 2013.
“I was present at the launch of the IPO on Monday and we remain very hopeful for this IPO. We are very happy to see 49 per cent on the market. The prospectus seems reasonable and the shares seem to be reasonably priced,” he said.
Speaking from the point of an investor, Suryadevara described the IPO as a “sound investment.”
“This investment looks good and we hope to see the public invest. Compared to other listings on the stock exchange the dividends look attractive,” he said.
Vivek Charran, president of San Juan Business Chamber, believes that the IPO will be a success. READ ARTICLE