Market ready: PIBT shares start trading, $60m rights issue to follow

PIBT is first dirty cargo terminal being built at a cost of $185 million.

KARACHI:

Trading in shares of Pakistan International Bulk Terminal (PIBT) commenced on Monday as soon as business tycoon Haleem A Siddiqui hit the gong at the Karachi Stock Exchange (KSE) at 9:30am.

“Being the only dirty cargo terminal in the country, PIBT will help meet the country’s rapidly increasing demand for coal,” Siddiqui said after formally kicking off the stock’s trading on the bourse.

Siddiqui serves as PIBT chairman, which has a build, operate and transfer (BOT) contract with the Port Qasim Authority (PQA) for the construction, development, operation and management of a coal, clinker and cement terminal at Port Qasim for 30 years.

He added PIBT, being built at an estimated cost of $185 million, will become operational within 24 months to handle 12 million tons of coal, clinker and cement annually.



The existing issued and paid-up capital of PIBT is Rs545.7 million. Sponsors, directors and their relatives currently control 21% shares of the total issued and paid-up capital while the stake held by Premier Mercantile Services is 35.3%, which makes it the largest shareholder in PIBT.

Shares held by the general public, including corporate bodies, institutions and individuals, constitute 43.6% shares of the total issued and paid-up capital of PIBT.

Speaking to The Express Tribune, PIBT CEO Sharique A Siddiqui said the free-float of the company will not be more than 25%, as institutional investors are likely to hold on to their stake in the project.

In its meeting held on July 11, 2011, the board of directors of Pakistan International Container Terminal (PICT) – which is the parent company of PIBT – proposed to distribute 54.577 million ordinary shares, or 100% of the issued, subscribed and paid-up capital of the subsidiary company, having the face value of Rs10 each, to PICT shareholders as specie dividend in the ratio of one ordinary share of PIBT for every two ordinary shares held of the existing capital of PICT.

The PIBT CEO said the stock will trade more actively in a few months once the company holds its rights issue in order to raise approximately $50-60 million. The rights issue entitles a company’s existing shareholders to buy additional shares directly from the company in proportion to their existing holdings generally at a discount to the current market price.

Pakistan imports about four million tons of coal every year, which is consumed by household, power, brick kiln and cement sectors.

Pakistan’s coal reserves mainly in Thar are reported to be around 175 billion tons. But Siddiqui said Thar coal is mainly lignite and power plants converting from furnace oil require high-quality coal.

According to Topline Securities research analyst Muhammad Tahir Saeed, coal imports in Pakistan are expected to increase rapidly due to the construction of coal-fired power plants.

Noting that the government has signed memoranda of understanding with four independent power producers to convert from furnace oil to coal, Saeed said coal demand will rise by 28 million tons per annum.

Published in The Express Tribune, December 24^th, 2013.

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