PHP Float Glass gears up for public offer

Sarwar A ChowdhuryPHP Float Glass Industries Ltd plans to go public to raise funds for enhancing working capital, business expansion and repayment of loans taken from financial institutions.

If approved by the regulator, it will be the first glass manufacturing company from the private sector to enter the country's stockmarket after the lone state-run listed firm Usmania Glass.

PHP Float Glass, a concern of Chittagong-based PHP Group, will float three crore ordinary shares of Tk 10 each using the book building method, a modern pricing mechanism for initial public offering (IPO).

The company that specialises in making float glass, organises a roadshow in Dhaka today for institutional investors for indicative price setting of its shares.

A roadshow is required by the book building regulations and the eligible institutional investors will not be allowed to participate in the bidding unless they participate and quote prices at the roadshow for setting the indicative price.

The company with an existing paid-up capital of

Tk 70.51 crore has proposed an indicative price for each share at Tk 75, including Tk 65 in premium.

"Entire proceeds of the IPO will be utilised for the expansion of the capacity with diversified and value added products along with strengthening the distribution channel," the company said in its 'IPO information memorandum'.

The company said it has plans to set up an aluminium plant at an approximate cost of Tk 24.75 crore by May.

It also aims to set up three more projects costing around Tk 89 crore --one for glass bevelling, edging and drilling; a second for producing tempered glass; and a third for setting up warehouses and distribution facilities -- within a year from the IPO fund receipts.

A glass laminating plant is also planned to be set up within 18 months from the IPO fund receipts. "The remaining fund will be utilised for repayment of loans to financial institutions," it said.

PHP Float Glass, whose earnings per share (excluding capital gains) was Tk 1.94 and net asset value per share was Tk 47.49 as of September 2010, was set up in 2003 with technical assistance of Luoyang Float Glass Technology of China.

Currently, the principal products of the company are clear glass and mirror glass sheets. Clear-glass sheets range from 2MM to 12MM, of 10 different sizes. Mirror glass sheets produced are of two types -- single coating and double coating that range from 3MM to 5MM.

PHP mirror boasts around 70 percent of the mirror market share in Bangladesh.

Alliance Financial Services Limited is the issue manager for the IPO.