EDL-Gen to open rights offering subscription
EDL-Gen to open rights offering subscription
EDL-Gen, Laos' major electricity generator, will launch the sale of more ordinary shares at the end of this month in a bid to mobilise investment funding to bolster its power generating capacity.
The public company, in which the Lao government owns 75 percent of shares, announced the decision this week after assessing the demand for electricity shares in Laos and other countries. The company concluded it would be possible to sell the newly issued shares, despite the European debt crisis and global economic uncertainty.
According to the announcement, the power company will allow existing shareholders to subscribe to the rights offering from June 26 to July 6. Investors who hold four shares will have the right to buy one new ordinary share at 4,300 kip per share.
The company also announced it would sell the remaining shares to new investors at 4,800 kip per share, but was unable to provide a subscription date for the public offering, saying it would make another announcement later.
EDL-Gen planned to issue the additional shares at the end of last year to mobilise 5,600 billion kip (US$700 million) to acquire EDL shares from Independent Power Producer projects, but decided to postpone the share issue due to unfavourable domestic and external conditions.
Investors who want to purchase the newly issued shares can obtain share subscription forms and details of the subscription from BCEL KT, which is the underwriter for EDL-Gen.
Stockbrokers say EDL-Gen has strong potential for future growth as the demand for electricity in Laos continues to surge, providing the right conditions for the company to expand its power generating capacity and grow its business.
“According to the new Power Development Plan, domestic power demand should increase by 18 percent CAGR to 3,488MW in 2020, up 20 percent from the previous estimate,” BCEL KT says in its report.
“The rising domestic demand, together with the bright regional demand prospects (10 percent CAGR), will support EDL-Gen, which plans to increase generation assets and equity MW from 381MW in 2011 to 2,224MW by 2020, or 22 percent CAGR.”
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.
However, 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.
vientiane times
