EDL-Gen studies share market demand
EDL-Gen studies share market demand
EDL-Gen, Laos' major electricity producer, is assessing market demand before deciding whether to issue new ordinary shares so that it does not suffer a disappointment by mistiming the offer.
The public company this week assigned BCEL-KT, one of two securities companies in Laos, to assess the market demand for EDL-Gen shares, believing it will help the company to set up a precise timeframe for the issue of new ordinary shares after suffering a setback at the end of last year.
EDL-Gen had planned to issue new ordinary shares at the end of last year in hopes of mobilising at least 5,600 billion kip (US$700 million) to acquire Electricite du Laos shares in six Independent Power Producer projects. But the share issue was postponed when few people expressed interest in making a purchase.
The company has now revised its plan to increase its capital and hopes to issue the new ordinary shares this year, with the aim of boosting power output.
According to information from BCEL KT, which is the underwriter for EDL-Gen, current shareholders and new investors who want to purchase new ordinary shares issued by EDL-Gen can express their interest to the securities company.
“Investors who hold EDL-Gen shares, please be informed that EDL-Gen Public Company expects to increase its registered capital by issuing new ordinary shares which shall be offered for sale to the existing shareholders of EDL-Gen or right offering (RO)” reads an email from BCEL KT to investors.
“The subscription ratio shall be 4 existing EDL-Gen shares per one new share. In case there are ordinary shares remaining from the subscription according to the shareholding ratio, the company shall offer remaining shares.”
An official at BCEL KT said investors who hold four shares will have the right to buy one new ordinary share at 4,300 kip per share, while new investors will have to purchase the new shares at the market price.
EDL-Gen told the Lao Securities Exchange earlier last month that while the company is making good progress towards issuing the new shares, it is still unable to set up an exact timeframe for when investors will have the opportunity to buy the new shares.
The company said it would make an official announcement when the preparations are complete.
Critics say one of the major challenges for any company issuing shares in Laos is that the public is largely ignorant of stock trading procedures. It is felt that the government and the sectors concerned need to educate people about how they can make money by investing in stocks.
Most Lao people prefer to invest in real estate amid a surge in demand for accommodation and offices.
EDL-Gen was said to have generated total revenue of about US$110 million in 2011, a significant increase from US$95 million in 2010, thanks to heavy rainfall which boosted electricity generation.
vientiane times
