The New Nation - Internet Edition

Grameenphone share sale shrinks to $125 million

BUSINESS REPORT

The pending sale of shares in Grameenphone, the country's largest mobile phone company, has shrunk in size to $125 million from the $300 million that had been originally proposed, according to a source.

The total deal, which will precede a domestic listing, was initially to be broken into two $150 million chunks: a pre-IPO private placement aimed largely at international investors and an initial public offering of primary shares in Bangladesh. The private placement has now dropped to $50 million and been extended until the end of October - though it has an upsize option subject to the level of demand. Meanwhile, the IPO part of the deal has been halved to $75 million, and is scheduled to launch at the end of December.

This is a disappointing result for those interested in the country's nascent market. "For the country's capital markets this is a very important deal," says a market observer. "If this is a successful deal, it is going to encourage other large companies to list.

But if the IPO of Grameenphone, a company with such strong backing, is not successful, it doesn't send a good signal to the market."

"My sense is that the demand from foreign investors is not as strong as anticipated and that there is little domestic consensus about what it should price at," the observer says. He goes on to point out that the published research on the company has been minimal, making it hard for potential investors to get information about Grameenphone and the local telecom market.

Despite the turmoil in international markets, the country's stock market has been quite resilient to the downturn. The Dhaka Stock Exchange General Index (DGEN) saw an 87% increase last year, and although it has been unable to repeat that performance, the minimal level of international participation in the market has allowed it to weather most of the storm.

As other Asian markets dipped, the DGEN actually rose gradually, peaking on June 1 at 3,207 points. Yesterday, which was the first trading day after the week-long Eid holiday, it finished at 3,001 points, very close to the 3,017 points at which it opened the year. "You might have thought that this would make Bangladesh more attractive as a diversification play," says the source.

But the turbulence in international markets is not the only factor that may have influenced the decision to cut the size of the deal. Grameenphone has had its own bumps, most notably a public tussle in September between its two shareholders: Norwegian telephone company Telenor, which owns 62%, and Grameen Telecom, which holds the remaining 38%.

Muhammad Yunus, Nobel Laureate and the man behind the Grameen family of companies, claimed at an Oslo news conference in early September that the aims of the two owners were not in accord.

Both Telenor and Grameen Telecom, he said, want Grameenphone to succeed, however, "the agenda of Telenor to maximise returns for the benefit of its owners is in conflict with the social and non-profit agenda of Grameen Telecom". He cited the well publicised case of child labour being used at a workshop belonging to one of Grameenphone's suppliers, which he said helped bring the entire Grameen name into disrepute.

There was also the issue of ownership. Yunus said that when Grameenphone was founded in 1996, Telenor agreed that in six years it would be majority-owned and run by Bangladeshis. This has not yet happened, he said. Yunus may be annoyed that the 10% of the company on offer in the deal is not being offered to Grameen Telecom on a first refusal basis and, that even if it were, the size of the stake would not be enough to hand over control to the minority shareholder.

The country's telecoms sector has already attracted international attention this year. In June, Japan's NTT DoCoMo announced that it would pay $350 million for a 30% stake in mobile phone company TM International (Bangladesh).

The price values the company at a firm value to Ebitda multiple of 20.4 times, based on the previous 12 months earnings, one of the highest multiples paid for a telecoms company since 2004, and the highest for a non-controlling stake. Citi advised the seller, AK Khan Co, and it is also acting as the sole global coordinator and issue manager for Grameenphone's pre-IPO placement and IPO.

Accesstel enters mobile banking

BUSINESS REPORT

Access Telecom (BD) Ltd (AccessTEL), the pioneer of wireless broadband access (WBA) network and broadband services in Bangladesh, through its SBU, APX Network (Pvt) Ltd has entered into an agreement with QSPAN Technologies Limited to extend "Bank Branded" Mobile Banking Services, complete with an internet banking interface designed specifically for the commercial banks in Bangladesh.

The QSPAN solution will allow the banks to exponentially increase their retail customer base and increase their stake in the inward foreign and domestic remittance businesses.

The Q-span solution also offers the lowest cost solution for banking transactions providing the banking industry with a significant advantage over its competition. Although the technology will use both the Internet and mobile networks (SMS) to transport data to complete the transactions, the technology is completely mobile operator independent enabling the banks to offer the service over all mobile networks.

Through bank authorized agents located across the country, customers will be able to signup and create new bank accounts instantly, deposit money into their accounts via bank branded top up cards, send money to others from their mobile phone securely and withdraw money from their accounts from the authorized bank agent locations, ATM Machines and Bank Branches.

This will allow the Banks to provide services in areas where it was previously cost prohibitive and finally be able to offer a comprehensive banking service to the millions of under-banked and un banked consumers.

About Q-span:

Q-span is a technology provider specifically for the banking industry enabling banks to offer their own "bank branded" mobile banking services to their clients.

Using best-of-breed technology, the mobile banking service uses the most secure solution available today for both the bank and the end-user.

Services include; transfers between accounts, peer-to-peer fund transfers (remittances) both domestically and internationally, bill payments, merchant payments, cell phone airtime loading, balance inquiry and a host of other features designed to provide the ultimate convenience to the consumer at the lowest possible cost.

ICB Capital Management earns Tk 388.9m net income

BUSINESS REPORT

The eighth annual general meeting (AGM) of ICB Capital Management Ltd (ICB CML), a subsidiary of Investment Corporation of Bangladesh (ICB), was held in the city on Sunday.

Chairman of the company Md Ziaul Haque Khondker presided over the meeting.

ICB CML Chief Executive Officer Md Iftikhar-uz-zaman and other directors and shareholders were present at the meeting.

The meeting approved the accounts and directors' report of the company for the year ended 30 June, 2008.

The total income of the company in the financial year (FY) 2007-08 was Tk 538.4 million while expenditure amounted to Tk 149.5 million resulting net income before tax of Tk 388.9 million.

After provisioning and income tax, the net income of the company stood at Tk 347 million.

With the addition of non-distributable income of Tk 149.8 million of the previous year, the company had net distributable income of Tk 497 million during the year which yielded earning per share of Tk 417.57 of Tk 100 each.

The shareholders approved cash dividend of Tk 10 per share and stock dividend of one bonus share for every 4 shares (4:1) for the FY 2007-08.

During the year, ICB CML signed issue management agreement with 10 companies amounting to Tk 4.1761 billion and provided underwriting commitment of Tk 73.8 million to 6 companies.

Dreamworks joins India's Reliance

BBC News, Los Angeles

The film studio Dreamworks, co-founded by Steven Spielberg, has agreed a joint venture with one of India's biggest entertainment conglomerates.

Reliance ADA Group, run by Anil Ambani - the sixth richest man in the world - is already a big player in Bollywood, India's film business.

Now the new studio will make movies in the US, putting large amounts of Indian money into America's film industry.

It is a story of Hollywood meets Bollywood in a $1.5bn (£0.85bn) deal.

This is a happy ending to a tale that could have turned nasty.

Dreamworks was bought by movie giant Paramount Pictures in 2006. Under that arrangement, hit films like Transformers were made.

But the two sides have been looking to separate for some time and it was thought negotiations would be difficult and protracted.

Now, a deal has been struck quickly.

At the centre is superstar director Mr Spielberg himself, who as a producer and director, has overseen some of the biggest box office hits including ET, Schindler's List and Jaws.

He will become one of the chief executives of the new studio.

Square Pharma posts 10.13 pc growth in export

BUSINESS REPORT

The country's largest drug manufacturer Square Pharmaceuticals Ltd has posted 10.13 percent growth in its annual export during the year that ended on March 31, 2008.

The company's export sales, which amounted to Tk 192.95 million in the previous year, has gone up by almost Tk 20 million to stand at Tk 212.49 million in 2008, its annual report for 2007-2008 said.

At the same time, the conglomerate's net turnover has increased by 10.09 percent to Tk. 8.26 billion. The net profit, which grew 8.46 percent, stood at Tk. 1.87 billion.

However, the company's Gross Turnover and Gross Profit, which grew by 9.81 percent and 5.24 percent respectively; shows a sharp decline from the growth of previous year when its gross turnover rose by 22.94 percent and the gross profit increased by 26.04 percent.

"The slower growth in gross profit was due to increase in cost of raw materials, packing materials and factory overhead," the report says.

"Cost of power and laboratory consumables increased by over 30 percent which in turn increased the overhead expenses. Operating and financial expenditures also increased," the report observed.

The slight decline in the growth of net profit on the other hand, according to the report, is due to increase in interest and administrative expenses and provision for corporate taxes and deferred taxes.

The company, during its annual general meeting held on September 16 this year, has approved Cash Dividend at the rate of Tk. 40.00 per share for the year 2007-2008. It also approved declaration of bonus shares at 35 percent.

During the year 2007-2008, Square has contributed around Tk 1.872 billion to the National Exchequer as against some Tk 1.857 billion during the previous year. "The contribution constitutes 22.67 percent of the sales revenue in 2007-2008 as against 24.76 percent in the previous year," the report says.

"During the aforementioned year; the company among other things, has invested around Tk. 36.42 million in improving its laboratory," the report informed. Also during this year, the company, for the first time has exported basic chemicals worth Tk 2 million.

"Now, with the securing of license under UK MHRA, it is expected that the export potentials will increase substantially in the near future," the report predicted.

Square, at present is exporting its pharmaceuticals and other products to around 30 countries of the world including Myanmar, Nepal, Kenya, Libya, Sri Lanka, Vietnam, Afghanistan, Iraq and Ukraine and Yemen.

Pond's premium range launched at Agora

The launching ceremony of Pond's premium range took place on September 26 last at Agora, Gulshan Outlet in the city.

Mr Rakesh Mohan (Chairman and Managing Director, Unilever Bangladesh Limited), Mr Mizanur Rashid (Customer Development Director, (Unilever Bangladesh Limited), and Mr. Niaz Rahim (Managing Director, Rahimafrooz Superstores Limited) inaugurated the Pond's premium range Counter and the newly renovated beauty zone.

The Pond's premium range products will be available at the counter, while the main attraction of the beauty zone will be a skin consultant trained and ready to provide beauty tips for women. Pond's has decades of experience in skin care and beauty solution for women across the world. Unilever constantly strives to manufacture the best quality world- class products. To this end, Unilever has introduced in Bangladesh two categories of Pond's premium products: the anti-ageing 3J.'1d the skin lightening range. This range is also available in other modem shopping malls and beauty cosmetics stores.

Standard Insurance IPO lottery Oct 16

Lottery for share allotment of Standard Insurance Limited will be held on October 16 at 10:30 am at the Bashundhara Convention Hall, Baridhara in the city.

The lottery result will be posted on www.standardinsuranceltd. com and www.dsebd.org. The subscription of the insurance company's public offer opened on September 7 while closed on September 20. The Standard Insurance floated 0.9 million ordinary shares with the face value of Tk 100 each to raise Tk 90 million from the stock market.

Myanmar leader Maung Aye to visit Bangladesh

XINHUA, Yangon

Vice-Chairman of the Myanmar State Peace and Development Council (SPDC) Maung Aye will pay an official visit to Bangladesh in the near future, said an official announcement issued from Nay Pyi Taw on Saturday without giving the date of his visit.

At the invitation of Dr Fakhruddin Ahmed, Chief Adviser of the Bangladesh Caretaker Government, Maung Aye, who is also Deputy Commander-in-Chief of the Defense Services and Commander-in-Chief of the Army, will pay the visit.

Maung Aye's trip will be another one to Dhaka by a Myanmar leader in more than three years since September 2005 when SPDC member General Thura Shwe Mann toured the western neighbor.

Maung Aye's planned visit came after Myanmar and Bangladesh signed an agreement in Dhaka in July 2007 to establish a 25-kilometer direct road link between the two neighbors to boost trade and tourism.

The 20 million-U.S.-dollar "Friendship Road" from Gundhum in Cox's Bazaar of Bangladesh to Baulibazar in Myanmar was also designed to connect China's Kunming under tri-nation road connectivity which will give further access to Thailand, Malaysia and Singapore and to the Asian Highway.

Myanmar and Bangladesh have maintained exchange of high-level visits in recent years. In December 2002, Myanmar SPDC Chairman Senior-General Than Shwe visited Dhaka, while in 2003, Bangladesh Prime Minister Khaleda Zia came to Yangon, during which the two countries signed two memorandums of understanding (MoUs) on the establishment of a joint trade commission and an agreement on coastal and maritime shipping.

According to figures of the Ministry of Commerce, bilateral trade between Myanmar and Bangladesh stood over 60 million U.S. dollars annually with the balance of trade favoring Myanmar.

The two countries are striving to increase their bilateral trade to 100 million dollars, the sources said.

ACI enters DSE and CSE

ACI Formulations Limited is pioneer in the private sector to apply for direct listing at Dhaka and Chittagong Stock Exchanges under Dhaka Stock Exchange (Direct Listing) Regulations,2006. Photo shows CFO of ACI Limited Muallem A Choudhury handing over the Application and Information Document for Direct Listing to Salauddin Ahmed Khan CEO of Dhaka Stock Exchange at a simple function at the latter's office this month. Also present in the function amongst others CEO of ICB Capital Management Limited Iftikhar-uz-zaman.