Stock

Record demand for Laugfs IPO

17 Nov 2010 - {{hitsCtrl.values.hits}}

By Deepal V. Perera
The spirited Laugfs Gas' Rs. 2.5 billion-Initial Public Offering (IPO) has ignited a record demand with applications worth Rs. 42.3 billion received reflecting a near 17 times oversubscription.
The Company said that the number of applications at over 64,000 was a record for any IPO whilst the final accepted number excluding rejects was 59,011.

The offering of ordinary voting shares worth Rs. 1.725 billion (75 million shares at Rs. 23 each) had triggered a response worth Rs. 28.37 billion and the non voting tranche worth Rs. 780 million (52 million shares at Rs. 15 each) saw applications worth Rs. 13.96 billion.

The ordinary voting shares saw an oversubscription of 20.2 times and non voting segment by 21.8

times. Applications from the customer category amounted to an oversubscription of 5.4 times for voting shares and 2.8 times for non voting. The total offering of the IPO amounted to 22% stake of Laugfs, the country's second largest player in the downstream LP Gas industry.

An elated but a humble Laugfs Chairman W.K.H. Wegapitiya described the public demand as a true "golden harvest" matching the theme of its IPO bearing the same message.
The company was intending to distribute and allocate all shares on the basis of 80% to public, 10% each for employees; and dealers and customers.

Wegapitiya said that Laugfs was overwhelmed by the tremendous interest shown by a significant segment of the ordinary public who never participated in an IPO or had any dealings in the stock exchange previously.

"Applicants were spread countrywide with 40,000 coming in from remote areas including the North and East.

We hope to retain these applicants as shareholders who will remain in the company in the long run and expected to be benefited by better returns whilst remaining actively involved in the company's affairs in the future," Wegapitiya told a news conference.

Given the unprecedented demand, Laugfs Board has devised an equitable basis of allotment. The salient features of it are; all applicants who requested up to 200 shares of any class will be allotted in full. Both classes of shares on offer will be allotted on fair proportion to the total number of shares applied by an individual applicant of any category.

Owing to under subscription in categories of employees and dealers, all applicants therein will be allotted in full.

"We started our company nine years ago in a very humble way and since then we managed to bring our company to a world class indigenous energy company. Today we are happy that people responded to our call to buy shares from our company and become partners in our next level of operations," Wegapitiya added.

He said the primary objective of the IPO was to raise capital to finance the company's business expansion plans to enhance its storage and filling capacity vital for its operations, widen the distribution network and the introduction of new LP Gas Products. Also part of the funds raised through the IPO will be utilised for two key development projects envisaged by two of its subsidiaries to construct a
100-room hotel in Chilaw earmarked as one of premium locations in the west coast to cater to the booming tourist industry and also to put up 72-room serviced apartment complex in the heart of Colombo city at Maya Avenue Colombo 6. The balance funds will be utilised to retire high cost short and long term borrowings. This is expected to improve the bottom lines of the company and will also contribute to ease the strain on cash flow which will eventually lead to a healthy working capital situation.

Stock

Record demand for Laugfs IPO

Most Popular Articles

LAUGFS gas prices remain unchanged

New US tariff could erode Sri Lanka’s export competitiveness: CCC warns

CSE slides sharply as Middle East tensions trigger broad-based selling

CSE rebounds as lower oil prices and strong crossings lift sentiment

Pelwatte Dairy commissions Sri Lanka’s largest dairy effluent treatment plant

CSE surges as peace deal optimism sparks broad-based rally

Latest News

Hamilton wins first grand prix for Ferrari as Antonelli retires

Refugee-Turned-Star Irankunda delivers

Modified Dengue strain driving surge in cases: Health Ministry

Over 5,000 Bharatanatyam dancers in Colombo clinch Guinness World record

Court allows Tissa to seek answers from Prime Minister