USD 10 Million Port IPO – Largest in Bahamas History
Enthusiastic Bahamians turned out with a record amount of investment cash to grab a share of the company now developing the 56-acre Nassau Container Port and 15-acre Gladstone Freight Terminal.
In the initial public offering (IPO) for the port’s holding company, Arawak Port Development (APD), investors scooped up all $10 million worth of shares offered in the hugely successful IPO.
“This was the most widely subscribed IPO in the history of Bahamian capital markets,” said Michael Maura Jr., APD’s chief executive. “The response was overwhelming from a wide cross-section of Bahamians. Our $10-million IPO generated $45.65 million worth of subscriptions — more than 4.5 times what we set out to raise.”
According to initial reports, up to 95 percent of subscribers are Bahamians from all walks of life. In all, a whopping 11,397 Bahamians participated in the offering to own a stake in the new port and APD Ltd. (BISX: APX), which will be traded on the Bahamas International Securities Exchange in March, 2012.
Everyone who met eligibility requirements will retain at least a portion of their shares. However, the overwhelming support of the IPO will likely translate to many large investors having the excess funds returned.
‘Bottoms Up Approach’ to IPO Participation
Mr. Maura stressed that everyone was on the “same level playing field the first day of the IPO, no one was given preference to purchase shares. We took a bottoms up approach to get everyone involved” during the six-week IPO that ended January 31, 2012.
Public investors now own a 20 percent equity stake in APD Limited. The remaining shares are owned equally between private investors (40 percent) and the Government of The Bahamas (40 percent).
Mr. Maura added that APD Limited — which is made up of the partnership between the private sector, government and the Bahamian investing public — will provide convenient and economical processing of international freight for New Providence residents and the local business community.
Likewise, investors see opportunity. The Nassau Container Port also is expected to grow annual revenues that could fluctuate between $25 and $27 million over the next three years, Mr. Maura said.
One million shares sold
The success of the IPO didn’t come without a big push from local leaders.
In the weeks leading up to the closing of the IPO, Mr. Maura, Dion Bethell (CFO of APD Ltd.), Ken Kerr (President of Providence Advisors), Anthony Ferguson (President of CFAL) and others made up a team that toured The Bahamas to promote the IPO and highlight its significance for The Bahamas and Bahamians.
“We reached a lot of people with our pre-IPO tour,” Mr. Maura said. “This IPO was a learning opportunity for many Bahamians who were investors for the first time. It was very exciting to see so many people participate.”
The Government of The Bahamas also offered interest-free salary advances to government employees and civil servants so they would have the ability to take part in this once-in-a-lifetime opportunity.
In the IPO, one million ordinary shares were offered at $10 each, with a minimum investment of 50 shares or $500. After that, subscriptions were offered in increments of 25 shares.
APD Limited was formed in 2009 to design, develop, construct, manage, operate and maintain the Nassau Container Port and the Gladstone Freight Terminal.
Dredging Today Staff, March 1, 2012; Image: nassaucontainerport