Home' Trinidad and Tobago Guardian : January 2nd 2014 Contents BG6 | NEWS
BUSINESS GUARDIAN www.guardian.co.tt JANUARY 2014 • WEEK ONE
Some of the biggest companies in T&T s business
sector captured headlines in 2013.Investors, indi-
vidual and institutional, received the news of the
initial public offering (IPO) of shares in First Cit-
izens with much excitement. Brokers were hard-
pressed to keep up with the investing public s need to own
a piece of T&T s indigenous bank, however small.
It was hugely oversubscribed, attracting more than $3 billion
in offers while, according to the prospectus, the net proceeds
were an estimated $1.05 billion after the deduction of transaction
expenses, which were about $13.6 million, but before employee
First Citizens launched the largest ever IPO of shares in the
history of the T&T Stock Exchange with a market value of
approximately $1.1 billion on July 15, 2013, at an offer price
of $22 per share. The bank offered 48,495,665 shares for sale
to the public, representing approximately 19.3 per cent of the
Speaking before the planned September 16 listing of First
Citizens on the T&T Stock Exchange, Wain Iton, the then
TTSE general manager and chief executive officer, described
it as "a sound investment" and "a quality listing." The First
Citizens shares ended that first week at $34.94 per share and
just before Christmas, the share traded at $40.25---an increase
of about 83 per cent from its initial offer price.
First Citizens shareholders have all reason to be pleased as
punch. First Citizens stated in the prospectus it will target an
annual dividend payout percentage of between 45 and 55 per
cent of its net profit after tax.
Late in December, First Citizens declared after-tax profits
of $606.5 million for its 2013 financial year, which represented
an increase of $160 million or 36 per cent compared with its
With earnings per share of $2.41, the bank s declared dividend
of $1.09 is equal to 45 per cent of its after-tax profit---an indi-
cation that the company has given itself the possibility of
hiking its dividend payout percentage in years to come.
Chairman Nyree Alfonso reported that for the year ended
September 30, 2013, the bank s profit before tax grew by 3.9
per cent to $742.2 million as compared to $714.2 million in
the previous year. Profit after tax was recorded at $606.5
million representing an increase of $160.1 million or 39.9 per
cent when compared with 2012.
This is the same bank, deputy chief executive officer Sharon
Christopher said in the book, On Becoming First, that was
once disparagingly called scrap metal but has since gone on
to become the highest rated of T&T s domestic banks in the
entire English-speaking Caribbean. It had the honour of
labelling it for the third consecutive year the only bank in the
Caribbean to be named amongst the safest banks in Latin
America and the Caribbean region. Global Finance used a
comparison of the long-term credit ratings and total assets
of the world s largest banks and ratings from Moody s, Fitch
and Standard & Poor s.
The Unit Trust Corporation was among several institutional
investors in the IPO, with its executive director Ian Chinapoo
saying the corporation UTC applied for and received 6.06
million shares, exactly half of the 25 per cent of the shares
offered to mutual funds, and 12.5 per cent of the 48,495,665
shares on offer and 2.5 per cent of the bank s total shares. The
UTC s investment has reaped rewards, earning it paper profits
at $110 million by yearend.
NGC's invests big
The second largest financial transaction to capture the busi-
ness community s interest was the National Gas Company s
(NGC) acquisition of the 39 per cent stake in Phoenix Park
Gas Processors Ltd (PPGPL) held by United States-based
energy giant ConocoPhillips in a US$600 million deal.
Speaking at the end of the official opening ceremony for
the 2013 Deepwater Bid Round in Port-of-Spain in August,
Energy Minister Kevin Ramnarine, said the deal had been
Ramnarine said the NGC acquisition was the Government s
largest through one of its state enterprises since 1985 when
T&T acquired Texaco Trinidad Ltd refinery, now Petrotrin.
Prior to the deal, NGC had a 51 per cent interest in PPGPL.
The transaction gave the state-owned natural gas distributor
a 90 per cent stake. In 2001, NGC divested 20 per cent of
its shares to National Enterprises Ltd (NEL). The remaining
ten per cent is owned by Houston, Texas-based Pan West
Engineers and Constructors Inc, a subsidiary of General Elec-
For the year ended December 31, 2012, NGC recorded a
$3.930 billion after-tax profit, about $670 million less than
the $4.604 billion profit it made in 2011. The company ended
2012 with $12.34 billion in cash and cash equivalents.
NGC had expressed an interest in acquiring ConocoPhillips s
39 per cent share since 2003. ConocoPhillips changed its mind
in 2004, but reversed that decision in 2013. Before proceeding
with the deal, NGC sought the opinions of First Citizens and
Credit Suisse, with the two endorsing the buy.
Speaking on the composition of the PPGPL board, Ramnarine
said there were seven directors: four from NGC, two from
ConocoPhillips and one from GE. Now NGC will have six out
of the seven.
"This gives us control of an asset responsible for marketing
liquefied petroleum gas (cooking gas) and natural gasoline,"
Following the transaction, NGC chairman Indar Maharaj
described NGC s acquisition of an additional 39 per cent stake
in PPGPL as an "excellent" deal for the company and T&T.
The transaction was financed from NGC s internally-gen-
erated resources, said Maharaj in a Business Guardian interview,
at which he was accompanied by NGC s vice president, com-
mercial, Anand Ragbir.
"When we look at the price we paid for it and the strategic
and financial returns from it, we know that we got a very
good acquisition," Maharaj said.
He said PPGPL has been a very profitable operation over
the years because it gets its raw material, natural gas, from
the NGC "at what we consider to be a low price."
"What it meant, therefore, is that PPGPL has a low-cost
input that generates a high-value end product, which would
have resulted in the company generating a great deal of cash,
making it a very profitable operation," Maharaj said.
Speaking at NGC s Christmas function at the Hyatt Regency
Trinidad hotel, Ramnarine said 2013 would go down as the
year the NGC was transformed from a company that had a
narrow remit to transport, aggregate and market natural gas
to a fully integrated gas company.
He said three major feats were achieved in 2013 at NGC:
a move by NGC to self-market its LNG cargoes; the acquisition
of 39 per cent of PPGPL and the acquisition of Blocks 2c and
3a, which "gives us a larger presence in the upstream."
Ramnarine said one major initiative to expect from NGC
in 2014 is the listing of a portion of PPGPL on the T&T Stock
"This may eclipse the FCB IPO of 2013," he said.
Gas shortage issues
The planned turnaround of bpTT s Cassia B offshore gas
facility, one of the energy company s 13 offshore platforms,
in September, was a significant development in the energy
sector for 2013. The maintenance intervention cost $50 mil-
Two-thirds of bpTT s daily gas production is delivered
through the Cassia facility, which has operated 34.5 miles off
the southeast cost of Trinidad for the past ten years. The
manned facility is designed to handle up to two billion standard
cubic feet of gas per day.
In a statement, bpTT said the project included only ten
days of material impact on bpTT s gas supply. During that
period bpTT conducted modifications to the facility to allow
gas from its other offshore installations to bypass the Cassia
"Early completion of the turnaround was due to many
factors, including simultaneous activity on the turnaround
scope made possible by the early completion of the bypass
work in the first ten days of the project, no coating repairs
being required for the vessels following inspections and good
weather during the period," read the statement.
During that period bpTT conducted modifications to the
facility to allow gas from its other offshore installations to by-
pass the Cassia hub. These modifications significantly reduced
the production impact for the remainder of the planned main-
tenance activity, it said.
First Citzens IPO tops business agenda
Continued on Page 7
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