TPL Properties: Book-building process for IPO raises Rs696.8 million

Amount will be used to restructure balance sheet, reduce external debt

KARACHI: The book-building process for the initial public offering (IPO) of TPL Properties has raised Rs696.8 million that the company will use to restructure its balance sheet and reduce external debt.

In a securities filing on Monday, book runner Arif Habib Limited stated that the total demand received during book building slightly exceeded the total number of shares offered by the company. The share allocations were made at the strike price of Rs12.50 per share, which was also the minimum price investors were allowed to bid at.



There were 49 bids for 55.75 million shares on offer, it added.

The principal activity of TPL Properties is to invest and build real estate. Its flagship project is Centrepoint, a fully occupied, ground-plus-26-floor office complex opposite KPT Interchange in Karachi.

The transaction represents 26.8% of the total post-IPO paid-up capital of TPL Properties having a face value of Rs10 per share. The IPO was made through book building only, with institutional investors and high net worth investors bidding for at least 100,000 shares at Rs1.2 million.

Mutual funds subscribed to 11.7 million shares, which account for almost 21% of the total size of the IPO. Insurance companies and individual investors were allocated 11.6 million shares and 11.1 million shares, respectively.



Other subscribers included corporate investors (8.85 million shares), brokers (8.5 million shares) and commercial banks (4 million shares).

Foreign investors did not participate in the IPO, Arif Habib Limited said.

Out of Rs696.8 million, TPL Properties is going to spend Rs200 million on the repayment of a loan to Summit Bank. It will use Rs250 million for the maintenance of debt service reserve with Habib Bank.

It will use another Rs100 million as the advance to Centrepoint Management Services, a wholly owned subsidiary, to pre-pay National Bank of Pakistan’s loan. The company will retain the remainder (Rs14.8 million) as a contingency reserve.



Centrepoint is the first real-estate project of TPL Properties, which is part of the TPL group of companies having interests in a range of sectors.

Centrepoint has the rentable area of 202,732 square feet and generates a monthly rental of approximately Rs30 million in view of the average existing monthly rental of Rs147.11 per square feet.

In the future, TPL Properties plans to carry out one project at a time to ensure on-time delivery, it said in its offering document.

According to KPMG, an independent audit firm, TPL Properties is expected to post a net profit with gains on revaluation of Rs161 million in 2015-16 on a consolidated basis.

Published in The Express Tribune, June 28^th, 2016.

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