Business

SPEL book-building: Offer oversubscribed as over 20m bids received

Strike price set at Rs30 per share.

Our Correspondent December 09, 2014 1 min read

KARACHI:

The book-building portion of Synthetic Products Enterprises (SPEL) has resulted in the strike price of Rs30 per share.

The offer was oversubscribed, as the book-runner received bids for 20.2 million shares against the issue size of 14.5 million shares.

SPEL is engaged in the manufacturing and sale of packaging products for the fast-moving consumer goods (FMCG) and food industry as well as manufacturing and sale of technology-intensive products for the automobile industry.

According to Arif Habib Limited, which is the book-runner to the offer, The Dutch Auction Method determined the strike price of Rs30 per share that is at a premium of 30% to the floor price of Rs23 per share.

The book building portion of the issue represents 75% of the total issue size of 19.3 million ordinary shares. The issue size is equal to roughly 25% of the total post-Initial Public Offering (IPO) paid-up capital of the company.

The book-building exercise involved a lower limit of Rs23 per share and upper limit of Rs39.1 per share. Only institutional investors and high net worth individuals were allowed to take part in the book-building portion of the offer.

The general public portion of the issue will soon take place at the strike price of Rs30 per share. It will consist of 4.8 million ordinary shares, or 25% of the total issue size.

Total existing paid-up capital of SPEL consists of Rs580 million. Seven individuals, including directors of the company, currently own the company’s 58 million shares bearing a face value of Rs10 a share.

The company will use the funds raised through the IPO in the replacement and expansion of its manufacturing facilities. The envisaged plan is expected to generate extra sales of Rs1.3 billion in terms of revenue.

Its sales amounted to Rs1.7 billion in the last fiscal year. Its net profit for the same year was Rs121.9 million, up 102% from a year ago.

Published in The Express Tribune, December 10^th, 2014.

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