Thursday, May 6, 2010

Global Investment House - May 2008 GDR Issue


Like me you may have been intrigued by Abdul Munim's question at the shareholders' meeting about the owners of GIH's GDRs.  And you may be wondering a bit about the transaction.

Here's a link to the Prospectus.  
  1. The shares were floated at KD0.995 each.  Each GDR equal to five shares and offered at US$18.75.
  2. The shares currently trade around KD0.090 roughly a tenth of the offer price.  Book value is around KD0.133 per share.
  3. GIH's 2008 audited financials say that KD5.3 million was deducted from the proceeds as GDR expenses (page 59).  That makes the fee roughly 1.9% of total proceeds a very good fee indeed considering that the banks actually underwrote the deal.  For underwriting details see page 143.  Note the numbers there are for GDRs.  So the number of GIH shares they underwrote is 5 times the number shown.
As to details of ownership of the GDRs,  of course,  the Prospectus doesn't include this information for obvious reasons.  It was issued prior to the placement of the shares.

Nor for that matter does the info at the KSE answer the question.  Here in Arabic.  The English page doesn't have shareholder info for some reason.

As you'll see from the Arabic page, the GDRs are registered in the nominee names of BNY Nominees Ltd (7.092%)  and Bank of Mellon New York Nominees (11.429%).  So the identity of ultimate shareholders is not disclosed.  The GDR issue was for 306.7 million shares in rough numbers.  The 18.5% represents about 243 million.  So about 64 million shares not accounted for - presumably converted to regular shares?  Roughly about 4.9% of the total shares.

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