Azgard Nine to launch IPO at Rs 30 per share
KARACHI (March 09 2010): The Karachi Stock Exchange will witness another initial public offering (IPO) as Azgard Nine Limited (ANL) has announced to offer 83.333 million ordinary shares of Pak American Fertiliser Limited (PAFL) from its existing share holding in the company at an offer price of Rs 30 per share.
The listing of new companies at the stock exchange is said to be a positive trend. It would be the fourth initial public offering (IPO) during the current year as compared with only three IPOs during 2008. ANL is offering up to 24.99 percent of its shareholding in PAFL for sale at a fixed price of Rs 30/share to institutional investors and high net worth individuals through private placement, to be followed by an Initial Public Offering at the stock exchanges in Pakistan.
The ANL intends to raise Rs 2,500 million through the offer for sale of ordinary shares of PAFL. From its existing holding of 392.430 million ordinary shares, ANL may decide to increase the offered shares to 98.068 million under a green-shoe option for the IPO. In this regard, a presentation was arranged for members of Karachi Stock Exchange (KSE) in the auditorium of the exchange here on Monday.
Regarding the company, the audience were briefed that Azgard Nine Limited had created the fertiliser business through acquisition of 100 percent shareholding in Pak American Fertilisers Limited from the state owned National Fertiliser Corporation (NFC) in 2006 for Rs 16.1 billion ($269 million) under the privatisation program of the government, followed by acquisition of 100 percent shareholding in Hazara Phosphate Fertilisers Limited (HPFL), again through privatisation in 2008 for Rs 1.3 billion ($17 million) to achieve targeted diversification into phosphatic fertiliser business.
Significant value created post-acquisition through successful operational and financial restructuring by the new world-class management team. The presentation said that PAFL enjoys 7 percent share in the domestic urea market. Its ammonia and urea plants are located in District Mianwali with production capacity of 358,000 tons/annum, on track to an expanded capacity of 483,368 tons/annum by the first quarter of the calendar year 2010.
The HPFL has 63 percent share in the domestic market of single super phosphate (SSP) and its production facilities are located in district Hazara with production capacity of 90,000 tons/annum, on track to expansion to 162,000 tons/annum by the first quarter of 2010. JS Global Capital and Faysal Bank have been retained by ANL as Joint Financial Advisors and Arranger. JS Global is also mandated to act as Lead Manager for the IPO.