Robi postpones IPO plan
Sarwar A Chowdhury
Mobile operator Robi Axiata said it might not go for an initial public offering before July next year, as business circumstances are not favourable.
Robi has backtracked on the IPO for uncertainty over acquiring spectrum this year, an unsettled issue of SIM replacement tax and insufficient incentive for listing, according to a recent letter sent to Bangladesh Securities and Exchange Commission. “It appears that the conditions are not conducive to public offering at this point in time,” Robi said in the letter, signed by its Chief Financial Officer Yap Wai Yip.
Of the six mobile phone operators in Bangladesh, only Grameenphone is listed on the stockmarket.
Robi said it is doubtful that the factors and fundamental parameters will remain favourable for it to acquire further spectrum in 2015, as Bangladesh Telecommunication Regulatory Commission is in the process to call an auction for selling spectrum this year.
Robi, majority owned by Malaysia-based Axiata Group, rolled out its 3G services last year.
“Further uncertainties are intertwined due to the fact that SIM replacement claim by the National Board of Revenue is yet to be settled, which may affect the business as a whole and consequently our own business plans,” it said.
“Even if business circumstances become favourable, our shareholders are of the view that there is insufficient incentive to proceed for IPO, in light of the existing corporate income tax regime,” it said, in response to a regulatory letter that was sent to the operator in August last year.
Referring to the 45 percent corporate tax, Robi said the mobile phone operators are currently facing the highest rate of corporate tax in Bangladesh, which is a deterrent to business.
The same tax rate is also applicable to the tobacco industry, which produces cigarettes and other tobacco products detrimental to public health and general wellbeing. But the mobile telecom industry is continuously contributing to the development of the nation, the letter added.
“In this respect, we have written to the finance ministry, decision of which would be paramount to our shareholder's decision to offer shares to public,” Robi said in the letter.
Arif Khan, a commissioner of the stockmarket regulator, said listing is mandatory for a company that has a paid-up capital of more than Tk 50 crore. “And listing of such companies always brings good results for both the market and investors.”
Robi has a subscriber base of 2.5 crore as of September last year, with a 21 percent market share. Revenue in the January-September period of 2014 was Tk 3,601 crore, 5.8 percent lower than that in the same period of the previous year.
Source: Daily Star