Dhaka, Bangladesh (BBN) – A public-private energy venture has submitted a listing application to the securities regulator to float 28.57 percent of its shares, officials said.
The Mobil Jamuna Bangladesh Limited (MJBL), which controls nearly 26 percent share in the oil market, will offer 40 million shares with BDT 10 face value each to the public using the book building method.
The offering, if approved, is set to become the second largest IPO (initial public offerings) in Bangladesh after mobile telephony giant Grameenphone, which offloaded 69.40 million shares at a face value of BDT 10 each.
The company, majority owned by local EC Securities, applied for the IPO plan last week to the Securities and Exchange Commission (SEC) seeking listings on the stock market.
“The listing plan is intended to diversify our business,” managing director of the joint ventire Azam J Chowdhury told the Financial Express (FE), a local newspaper, on Sunday.
Global energy group ExxonMobil and state-owned Jamuna Oil Company Ltd, and EC Securities Limited, an investment arm of East Coast Group, have stakes in the 12-year-old company, previously known as Mobil Jamuna Lubricants Limited.
In Bangladesh, the company has pioneered exporting lubricants and its shipment has been steadily growing since 2007. Last year, exports grew 58 per cent after peaking at 453 per cent in 2008.
With a paid-up equity of Tk 1.40 billion, the MJBL officials said it has already lined up projects as part of diversifying its business.
“The IPO proceeds will be invested in a refinery and other high-tech sectors,” said Mr. Chowdhury whose business interests range from energy to banking.
Out of the planned 40 million shares selling, 60 per cent has been allocated for the public, 20 per cent for institutional investors, and 10 per cent for overseas Bangladeshis and 10 per cent for mutual funds, according to the IPO proposal submitted the SEC.
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Analysts believe the IPO size could top Tk.5.0 billion taka given the indicative price per share of BDT 127. Prime Finance and Investment Limited was tapped to manage the issue.
The final value of the company’s indicative price will be determined by institutional investors in line with book building method.
MJBL began its journey as a foreign project in 1998 before being incorporated in the same year. In 2003, it started producing advanced lubricants products.
EC Securities Limited holds the highest 74.98 per cent stakes in the joint venture, followed by Jamuna Oil.
Out of 243 energy and power companies operating in Bangladesh, only 11 are listed with the Dhaka Stock Exchange.
BOC Bangladesh, Padma Oil, Eastern Lubricant, Bd Welding, Summit Power, DESCO, Power Grid, Jamuna Oil, Meghna Petroleum, Titas Gas and Khulna Power are among the listed energy companies.
Market capitalization of energy companies at the Dhaka Stock Exchange reached BDT 301.426 billion, accounting for 13.24 per cent of, according to the DSE data.