Largest foreign investor divests holdings in PICT

By Kazim Alam, The Express Tribune

KARACHI: Looking to make hay while the sun shines, an investment company registered in the British Virgin Islands has recently divested its stake in Pakistan International Container Terminal (PICT) to a subsidiary of International Container Terminal Services Inc (ICTSI), which increases ICTSI’s interest in PICT to 63.6%.

Aeolina Investments Limited (AIL) was the third-largest shareholder in PICT before it sold its interest to ICTSI, which has been steadily increasing its holding in PICT since the first quarter of 2012 when it entered a joint venture with PICT’s erstwhile majority shareholder Premier Mercantile Services.

According to a corporate disclosure notice posted on the website of the Philippine Stock Exchange on December 28, where ICTSI is based, the company’s wholly-owned subsidiary – ICTSI Mauritius Limited – has entered into a share purchase agreement (SPA) with AIL, which owns 15.7% of the total issued capital of PICT.

63.6

The disclosure does not mention the per-share price at which ICTSI acquired AIL’s stake in PICT. Neither ICTSI nor AIL responded to questions that The Express Tribune sent them regarding the details of the SPA.

Speaking to The Express Tribune, PICT Director Aasim A Siddiqui said the port operator’s free-float is roughly 5% of the total shares. Siddiqui represents Premier Mercantile Services on PICT’s board of directors, with a 32% stake in the company.

Premier Mercantile Services originally held 47% of PICT’s shares before ICTSI signed an SPA with the company’s major shareholders last year. ICTSI acquired a 29% stake through the SPA while buying another 5% shares under a tender offer made to ordinary shareholders of PICT on the stock market. Jahangir Siddiqui and Company has already sold its stake to ICTSI in November.

Earlier, ICTSI had appointed four of the seven members on PICT’s board of directors, with the remaining two representatives from Premier Mercantile Services and one from Jahangir Siddiqui and Company, according to Siddiqui. “After this deal, ICTSI and Premier Mercantile Services will each have five and two board members, respectively,” Siddiqui said.

On the back of rumours about another share buyback offer between October 10 – the day ICTSI’s tender offer to purchase PICT’s shares on the stock exchange expired – and December 19, PICT’s share price went up from Rs147.5 to Rs269.9; an increase of 83.3% in just over two months.

“The stock price wasn’t going up on the expectation of higher dividends. Therefore, it is understandable why our largest foreign institutional investor has chosen to sell its stake now,” Siddiqui noted.

On Wednesday, the PICT share price dropped from Rs200.8 to Rs190.7, a decline of 5% in one trading session (the maximum allowed).

According to Dow Jones Newswires, ICTSI’s board has approved the appropriation of $83 million of retained earnings for domestic and foreign expansion in 2013.

Published in The Express Tribune, January 3, 2013.   

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