Jan 2015 Financial News

Cabinet approves IPO shares in PPGPL

Jan 16, 2015

The long-awaited initial public offering (IPO) of shares in Phoenix Park Gas Processors Limited (PPGPL) has been approved by Cabinet. However, the Prime Minister (PM) Kamla Persad-Bissessar yesterday assured “there will be no fire sale” of this valuable energy sector asset.

“Cabinet today (Thursday) agreed and approved, in principle, the IPO for Phoenix Park. The Minister of Finance (Larry Howai) and others will work towards implementing that...in the not-too-distant future,” Persad-Bissessar stated.

As noted by www.cbsnews.com yesterday, “A volatile day of oil trading ended with West Texas Intermediate (WTI) crude falling US $2.23 to end at $46.25 a barrel. Earlier in the day it jumped over $51. Brent crude, a benchmark for international oil, fell $1.02 to close at $47.67 in London.”

Referring to the TT $7.5 billion shortfall in revenue TT is projected to experience, as a result of falling global oil prices, the PM yesterday reiterated the message she delivered in her January 8 national address, that the PPGPL IPO was an example of how Government is “looking to raise revenue in other ways.”

Responding to recent criticisms about this IPO possibly being a “fire sale” in light of the recent fall in oil prices, including from Opposition Leader, Dr Keith Rowley, the PM declared, “We are not going bankrupt at this point in time, so there will be no fire sale.”

“If the prices being offered in the IPO are far too low, we will not pursue that option. As any good businessman knows, in your own trades in goods and services, if you are selling at a price too low, you will hold it. You will not fire sale it,” the PM noted, “unless you’re going bankrupt and I tell you, we (Government) are not going bankrupt at this point in time. So there will be no fire sale of any of the assets of the Government.”

Persad-Bissessar made the announcement in her opening remarks at a meeting with representatives of various business chambers at the Diplomatic Centre, St Ann’s yesterday afternoon. Several ministers were also present, including Finance Minister Larry Howai, Energy Minister Kevin Ramnarine and Trade Minister Vasant Bharath.
PPGPL’s IPO was originally scheduled for July 21, 2014 with its listing on the Trinidad and Tobago Stock Exchange (TTSE) set for September 22 at a reported $25 a share.

However, this was pushed back to an as-yet-to-be-announced date, because of the on-going investigation into the controversy surrounding the controversial purchase of 659,588 shares of First Citizens bank’s IPO by its then Chief Risk Officer, Hassan Philip Rahaman, who later sold 634,588 of those shares to family members and to five companies owned by the Rahaman family.

Meanwhile, the PPGPL became 100 percent locally-owned with the recent acquisition of a ten percent stake in the company by a consortium of the National Insurance Board of Trinidad and Tobago (NIB), National Enterprises Limited (NEL), and the Trinidad and Tobago Unit Trust Corporation (UTC).

The trio of local financial institutions achieved this through their joint venture acquisition of 100 percent of the equity of Pan West Engineers & Constructors, LLC (Pan West) for a total consideration of US $168 million.

Pan West, a wholly-owned subsidiary of General Electric Capital Corporation (GE), is the holder of a ten percent equity interest in PPGPL.

Source:
By Sasha Harrinanan
Newsday
Friday January 16, 2015

http://www.newsday.co.tt/politics/0,205633.html