Bahrain port to launch IPO by Q4

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APM Terminals Bahrain, the operator of the Khalifa Bin Salman Port (KBSP) in Bahrain, has firmed up its plans to launch an initial public offer (IPO) for the port by the end of the current year, a top official at APM Terminal said.

The decision has been taken in close consultation with the Bahrain government which has given it the go-ahead to list on the Bahrain Bourse by the end of this year, Mark Hardiman, CEO/managing director, APM Terminals Bahrain, told Gulf Industry magazine in an exclusive interview.

“Yes, we are going public this year. We should be listed on the Bahrain Bourse by the end of this year – that is our goal.

“We want to fulfil the obligations that we have as APM Terminals Bahrain and give back the public an opportunity to invest in what is a very successful public-private partnership (PPP) project,” Hardiman said.

The company is currently in the process of finalising its lead advisor and consultants for the offering and is also studying the regulatory aspects of the proposed transaction in consultation with its operational regulator - the Ministry of Transportation and Telecommunications’ (MTT) Port and Maritime Affairs (PMA).

The financial aspect of the deal is being regulated by the Central Bank of Bahrain’s (CBB) Capital Markets Supervision Directorate (CMSD).

“At present, we are at the stage of appointing the advisors and some of the consultants for the offering. By the fourth quarter of the year, we expect to be actually down the bourse ringing the bell, trading the shares, and inviting the public to become the shareholders of the company,” he said.

KBSP, which is a joint venture between APM Terminals International BV and YBA Kanoo Holdings of Bahrain, plans to offer a 20 per cent of its total equity through the IPO to the Bahraini public, Hardiman said.

He, however, didn’t say how much it hoped to raise in the initial public offering. No pricing has yet been finalised, he said.

“At the moment, we can’t put a figure to it. That’s being evaluated, but 20 per cent of the company equity stake will be offered to the public and each existing investor will divest proportionally,” he said.

APMT currently has 80 per cent ownership of the facility, with YBA Kanoo Holdings holding 20 per cent. With the proposed share offering, APMT will divest 16 per cent, which will dilute its stake to 64 per cent and its partner will divest 4 per cent, reducing its stake to 16 per cent.

The IPO was written into the concession agreement signed in 2006 by the partners, which began by taking over the old port that year. The 25-year concession period began in 2009, when the new port opened. It became fully operational in April 2010.

The operator had first announced plans to go public in 2015 but had to defer it owing to the uncertainty in the market and some technical reasons which Hardiman said have now been addressed with the assistance of the government.

“It was a bit challenging to do an IPO in 2015 because of the market conditions. Also there were some technical reasons which have now been addressed with the assistance of the government,” he said.

“We think market conditions are more conducive this time around and there’s more of an appetite for an IPO out there, as well. We are confident of success,” he said.

According to Hardiman, Bahrain has done extremely well in recognising the importance of economic diversification in the region.

KBSP, he said, clocked `good sales’ last year when a number of on-going infrastructure projects in the kingdom stimulated growth for the port, primarily Alba's Line 6 project, Banagas, Electricity and Water Authority (EWA) and looking into 2018, Bapco's modernisation project will also be bringing in volumes for the port.

“This IPO is coming in after a long gap in Bahrain and might as well raise the flag for other companies to come forward. Hopefully, this could be the start of a new resurgence and raise the appetite in attracting new investors to the kingdom,” he said.

It is this positivity which is building a base for the launch of its IPO, he said. “Our part is to build that confidence in Bahrain,” he added.

KBSP has showed continued positive growth in container volume and general cargo, reflecting Bahrain’s strong economic and trade performance.

KBSP has witnessed container volume growth by a CAGR of 10 per cent between 2009 and 2017. The port has also recorded an impressive 7 per cent growth in container volume in 2017, with an additional 21 per cent spike in general cargo with a positive outlook estimated for 2018. The majority of this volume is attributed to gateway cargo with the KBSP currently also handling two deep sea services - The Ocean Alliance MEA3 & MSC Cheetah Service. – TradeArabia News Service