Jun 2017 Financial News

40.24m TTNGL shares go on sale today at $21

Jun 05, 2017

A full-page TTNGL advertisement in yesterday’s Guardian described the additional public offering (APO) of 40,248,000 Class B shares at a share price of $21 per share in TTNGL as a “perfect opportunity” for local individual and institutional investors to acquire shares in the Point Lisas-based producer of propane, butane and natural gasoline, Phoenix Park Gas Processors.

TTNGL is the company set up by the Government to hold the 39 per cent of Phoenix Park acquired by state-owned National Gas Company (NGC) from US oil major Conoco Phillip in August 2013.

The APO of shares in TTNGL opens today and, if it is fully subscribed, the Government would raise about $845 million from the share offer.

In delivering the 2017 budget, Finance Minister Colm Imbert announced that the Government proposed to sell additional shares in First Citizens and in TTNGL with the expectation that both offerings would raise $1.5 billion each.

The First Citizens share offer, which was expected to raise $1.5 billion, only resulted in $1.025 billion going into the Government’s coffers, as only 32,035,770 shares or 66.0 per cent of the total shares on offer were purchased by local individual and institutional investors.

In delivering his mid-year budget review on May 10, Imbert rejected the notion that the First Citizens offer of shares was priced too high and did not provide prospective shareholders with enough incentive to acquire the shares.

Imbert said: “We have taken note of the comments that this APO did not realise the projected revenue and the theory that the offer price was too high.

“However, these comments ignore the fact that if the offer price for FCB shares in this APO had been priced lower than the actual market price, the value of the shareholding of existing shareholders would have been seriously compromised and diluted, leading to loss in asset value and net worth for thousands of ordinary people, pension plans and institutional investors.

“In the circumstances, we are quite satisfied to have been able to raise $1 billion from this APO without damaging the value of FCB shares.”

Following the failure of the First Citizens IPO to achieve its original target, Imbert scaled back the TTNGL offer, which was originally due to raise $1.5 billion.

In the mid-year budget review, he said the offer for the sale of 40,248,000 Class B shares held by NGC or 26 per cent of the issued share capital of TTNGL would generate approximately $800 million.

In explaining the decision to offer an additional 26 per cent stake in TTNGL—and not the residual 51 per cent as he had announced in the 2017 budget—Imbert said: “The Government has decided to leave a residual balance of 25 per cent held by NGC in TTNGL at this time to allow NGC to retain effective control of Phoenix Park Gas Processors Company Limited (PPGPL), and allow NGC to continue to discharge a strategic role in the gas sector value chain.

“Again, the focus will be on maintaining the value of TTNGL shares for existing shareholders, while offering an attractive APO price.

In a full-page advertisement yesterday, justifying its reason why shareholders should invest, TTNGL said the company, “provided the highest dividend yield of 7.14 per cent on the locat stock market, for the financial year ended December 31, 2016.”

“Quarter 1, 2017 Profit After Tax has also increased by 88.4 per cent over the corresponding 2016 period.”

Shareholders have until June 28 at 400pm to purchase shares at $21.

Source:
Trinidad Guardian
Sunday June 4, 2017

http://www.guardian.co.tt/business/2017-06-04/4024m-ttngl-shares-go-sale-today-21