Home' Trinidad and Tobago Guardian : January 29th 2015 Contents JANUARY 2015 • WEEK FIVE www.guardian.co.tt BUSINESS GUARDIAN
FEEDBACK | BG11
Resolution negotiation and conflict
resolution skills workshop
Port of Spain, February 24-27
"This was an exceptional workshop! I am now very informed in the subject and
I have been applying the concepts and principles learnt. Both instructors were
excellent facilitators. Thank you."
- Kamini Heeralal-Khan, General Manager HR (Ag.), Trinidad & Tobago Postal Corporation
An article, "Is NGC approach in investors inter-
est", by Anthony Wilson in the January 25 Sun-
day Business Guardian, raised the question of
the share price of the Phoenix Park IPO and
suggested that if the share price were $25/share
there was a good chance that the IPO would
be under-subscribed as opposed to if it were
priced at $20/share; and the share could then fall to this price,
$20, or less in the medium term.
Let us examine Wilson s thesis.
NGC has indicated that it intends to sell 49 per cent of the
asset (39 per cent of the company) it purchased from Conoco
Phillips for US$600million. It intends to recoup no less than the
sum of TT$1.88billion from the sale; equivalent to what it paid
for that portion of the asset.
To translate, NGC wishes to sell 19.1 per cent of the whole com-
pany for TT$1.88billion, ie this amount is seen as the proportionate
part of the net present value of the company s future earnings.
As an investor interested in buying part of this company and
looking for dividend returns, my first interest is in the past per-
formance of the company and what the future may hold for it.
If I am satisfied this company is worth investing in and, depending
on the diversity of my investment portfolio, I can decide to invest,
say, TT$5million in the company, ie attempt to own 0.27 per cent
of the company. Note that, at this stage, the price of the share
is unimportant to my decision to invest.
If the price of the share were $25/share I would buy 200,000
shares of the 75.2 million offered in the IPO. If the price were $20,
I would buy 250,000 shares of the 94 million offered; both entitling
me to 0.27 per cent of the company.
Hence the price of the share is irrelevant to my decision to invest
given my portfolio spread.
If, on the other hand, I were more interested in reselling after
the IPO to make a profit via the price increase of the shares, then
my decision would not be based directly on the price of the share
but on my estimation that the 19.1 per cent of the company is
worth significantly more than the $1.88 billion being asked. If my
view of the undervaluation of the 19.1 per cent of the company
is correct, then whatever the price/number of the shares at the
IPO (priced to recoup TT$1.88billion) they would be undervalued.
However it is recognised that the IPO share price is sometimes
deliberately undervalued to attract speculators who engage in
helping to on-sell the shares after the IPO to people who want
to invest but need the outcome of the IPO to advise them on,
confirm, the value of the investment.
access to submit designs for buildings and developments
for statutory approval in spite of the Registration Act.
Hopefully provisions within the final version of Procurement
Act will follow the leadership of Barbados on this point.
After a decade of being dazzled and distracted under the
guise of an excuse to accelerate projects when the real strategy
was the introduction of a design/build system and the whole-
sale importation of foreign contractors and consultants, it
is not surprising that the local construction industry has
now been significantly weakened.
Much of the local expertise that was developed in the 70s
and 80s has since been lost with local architects now left
to look on in stunned amazement at the blatant disregard
for local professional expertise taking place today using their
hard earned tax dollars without being given even a fair chance
of competing for work in our own country.
We should ask the question: is it that local construction
industry is failing in some fundamental way?
We designed and built stadiums, hospitals, offices, lab-
oratories, malls, apartment complexes and halls of justice
that stand today as icons of national pride.
In contrast there are spectacular failures by foreign firms
such as NAPA (now closed within five years of opening), the
Tarouba Stadium (that never opened), the General Hospital
in Tobago (built at a staggering cost) and the Oncology
Medical Centre (foreign consultants in receivership) and
finally the piece de resistance, the Piarco Airport Terminal
costing $1.6 billion (the American architect ended up serving
a jail sentence in a Miami jail.)
It is no coincidence that the introduction of design-build
from foreign consultants has led to a public perception that
corruption was perhaps the most plausible motive for what
It is my contention that the construction industry has
regressed over the last 40 years. We are further back now
than when this country gained independence. Perhaps the
time has come for us to accept that we have been poor cus-
todians of our resources.
What we need now is a new vision for the construction
industry, a vision that relies on a notion of developing its
local human resources so as to allow for expansion and export
of the industry within the region.
Government---not just the current administration---is one
of the major contributors to the disintegration of the local
construction industry and now needs to take responsibility
and leadership to fix it. With the current world energy adjust-
ments taking place, a major shift in perspective is needed
as we are unlikely to be able to continue to expend the current
levels of foreign exchange needed to continue importing
construction services in this country.
I hope that I will be alive to see a turnaround of mindset
because I am of the view that we will not truly develop as
a nation until we address the fundamental issues of self-
confidence and national pride.
Brian Lewis qualified at the Architectural Association School of
Architecture in London, has been practicing as an architect in T&T
since 1971. He is a registered architect in T&T, Fellow of the T&T
Institute of Architects, registered architect in Barbados, past AIA Asso-
ciation; a member, past RIBA Association; a member, past president
of the JCC; past president of the T&T Institute of Architects; past
member of the Interim Planning Commission, and past member on
the Professional Practice and Ethics Commission of the International
Union of Architects.
What's in a
from Page 10
Links Archive January 28th 2015 January 30th 2015 Navigation Previous Page Next Page