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Is new IPO good to go?

Thursday, June 5, 2014
BG View
Phoenix Park Gas Processors plant in Point Lisas

Although some preliminary details of the initial public offering (IPO) by the National Gas Company for Phoenix Park Gas Processors have leaked out, the offer has not been approved by Cabinet as yet and the prospectus is still to be delivered to T&T’s Securities and Exchange Commission (SEC).


There is a good chance, therefore, that some of the details that have been made public could change substantially given the intervention of Cabinet and the SEC.



And change would be appropriate because some of the details are bewildering, to say the least:



1) The preliminary proposal is that 75,852,000 Phoenix Park shares would be offered to T&T individuals and institutions at a price of $25 per share. 


The preliminary proposal envisages that, in the event of an over subscription, employees and retirees of the NGC (National Gas Company) and its subsidiaries or affiliates would be given the right to purchase a specified allocation of up to 5,000 shares at a ten per cent discount to the offer price. 


It is unusual, if not unprecedented, for retirees of a company to be afforded the same discount as the current employees. Such a proposal was considered for the First Citizens IPO and was vetoed by the authorities. Unless there is a really compelling reason why retirees from NGC (and its subsidiaries and affiliates) should be treated differently from First Citizens retirees, this proposal should not be entertained. If NGC retirees wish to purchase shares in Phoenix Park, they are free to do so, but the discount should be limited to the 900-plus current employees of the company