STO sells BML shares worth MVR33 million to Champa Brothers

The State Trading Organisation (STO) has sold its Bank of Maldives Plc (BML) shares worth MVR33 million (US$2.1 million) to Champa Brothers Pvt Ltd through the Maldives stock exchange.

STO MD Adam Azim told Sun Online that the shares – reportedly worth 30 percent of BML – were sold in a bid to improve the state-owned company’s finances.

“The shares were sold through the stock exchange on the open market. It was carried out in a way that anybody who wanted to buy the shares had the chance,” he was quoted as saying.

Sun Online reported back in December 2012 that Champa Brothers had purchased treasury bills worth US$11 million. The amount currently owed by the government to the company remains unclear.

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Police cooperative society to sell shares to officers

The Police Cooperative Society (Polco) has announced sale of shares in the company to police officers at MVR 100 per share ahead of a deadline of June 30, the Maldives Police Service (MPS) said in a statement this week.

Police officers were first invited to purchase shares in Polco on March 29, the anniversary of the MPS. The deadline was then extended by the board of directors of Polco to June 30 after a meeting on June 16.

According to the press release, Polco was set up in accordance with the Police Act to improve the welfare of police officers.

Since the controversial transfer of presidential power on February 7, 2012 in the wake of a violent mutiny instigated by officers of the Special Operations (SO) command, 1000 police officers were promoted, 110 new police officers were hired, a housing scheme was introduced for police officers with 300 flats to be developed in Hulhumale’, arrangements were made for cheap accommodation in Sri Lanka for police officers and their families and a loan scheme was set up for police officers.

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Dhiraagu shares to sell on Maldives stock exchange

Local telecommunications provider Dhiraagu will sell shares to the public via the Maldives Stock Exchange (MSE) starting next Thursday.

Government shares have meanwhile been sold to all applicants.

Of its 11.4 million shares, Dhiraagu has sold 41 percent under the Initial Public Offering (IPO) at a rate of Rf80 (US$5.2). The IPO became effective on December 25, 2011.

The government lately released 48 percent of its shares, which had a value of approximately Rf376 million (US$24 million). Of those shares, 15 percent were set to be sold and 4.7 million have been sold, reports Haveeru.

Most government shares were purchased by the Pension Administration Office, the State Trading Organisation (STO) and Allied Insurance.

Foreign investors may also purchase Dhiraagu shares.

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Amana Takaful IPO fully subscribed

Amana Takaful ended its Initial Public Offering (IPO) with a full subscription and 800,000 shares floated to the public in parcels of 25 shares each, at Rf20 (US$1.3) per share.

The issued shares have been alloted and a list has been sent to the Maldives Securities Depository (MSD) to be deposited in the respective MSD accounts.

“Our intention was to help change the way the Maldivian stock market operates as this was the first time that Maldivians, expatriates and foreigners were able to purchase securities in a Maldivian listed company,” said Hareez Sulaiman, the General Manager of Amana Takaful Maldives PLC, in a press statement.

Amana Takaful is the first Shari’ah compliant insurance company listed in the Maldives. It first came to the Maldives from Sri Lanka in 2003 in concept-form, and was licensed to provide insurance in 2010.

The IPO launch received support from Capital Marketing Development Authority (CMDA), Maldives Stock Exchange and the Maldives Monetary Authority (MMA).

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Addu City Council to purchase Dhiraagu shares

Addu City Council will buy Rf 400,000 (US$26,000) worth of shares in telecoms provider Dhiraagu, reports Haveeru, following the company’s initial public offering last month.

Dhiraagu had earlier announced its intention to sell 11.4 million shares at Rf 80 (US$5.1).

“We’re completing the process of purchasing the stocks in order to gather funds for our activities. By the grace of God, it’ll be a successful investment,” Addu Mayor Abdulla ‘Soabe’ Sodiq was reported as saying in Haveeru.

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Third of government’s Dhiraagu shares to be made public

The government has decided to release a third of its shares in local telcoms giant Dhiraagu to the public.

Dhiraagu a major player in the telecommunications, mobile and broadband internet markets of the Maldives, and is one of the country’s most profitable companies.

The government will make a third of its shares available to the public from October, to both local and foreign parties, reports Sun Online. Share prices have not yet been published.

The Maldivian government previously held 55 percent of Dhiraagu’s shares, while the British company Cable and Wireless held the remaining 45 percent. Upon winning the 2008 presidential election, President Nasheed’s government sold 7 percent of the shares to Cable and Wireless, reducing government shares to 48 percent and giving Cable and Wireless a controlling interest.

Minister of Economic Development and Foreign Trade, Mahmoud Razee, told Sun that studies would determine the prices and ratios of shares to be offered in local and international markets, and that the shares would be “affordable” to the average Maldivian.

Minister Razee also stated that as Dhiraagu was a strong company, people could benefit from buying its shares.

Opposition Dhivehi Rayyithunge Party (DRP) Deputy Leader Ibrahim ‘Mavota’ Shareef told Minivan News that the shares were valuable, but said he was not in favor of selling them.

“As far as [the DRP] is concerned, we do not believe this is a wise decision. Dhiraggu is a very profitable and well-managed company, and it makes a lot of money for the government. This is a time when we are undergoing an economic crisis, and we cannot afford to have these shares dispersed.”

Shareef said he thought most Maldivians would be interested in the shares, but said he doubted whether the majority of people would be able to afford them.

“The people who have the capacity to buy these shares are either foreign companies, or very rich Maldivians,” he said.

The government estimates that the sale of the shares will generate Rf 1.46 billion (US$95 million).

Shareef said the outcome would be obvious as soon as the shares hit the market.

“In the Maldives, we know who has the money. We know a majority of people don’t have the money. There must be some political reason for this decision, it’s not just an economic strategy,” he suggested.

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Govenment sells 20 percent of MWSC to Hitachi at same price

The ministry of finance has sold 20 percent of the Maldives Water and Sanitation Company (MWSC) to Japanese company Hitachi Plant Technology.

The deal was signed by Minister of Finance Ali Hashim and President of the Hitachi Company Masaharu Suvikawa in Male’ yesterday.

According to Fathmath Muaza, assistant director of the ministry of finance, the total sale was worth US$16 million, with 53400 shares sold at US$ 305.90 per share – the same price the government last bought them for.

Asked why the government has decided to sell part of a profitable business, Muaza said “At the end of 2008, the government had to buy back the shares it had with the Danish company [HOH Water Technology of Denmark] as per the [existing] joint venture agreement. All these years that company in Denmark held 24 per cent of the shares in MWSC.”

Mifzal Ahmed, investment advisor to the ministry of economic development, said Hitachi’s decision to purchase shares in MWSC shows that the foreign investment community regards the Maldives “as a very sound place to do business.”

” It also shows that large companies are interested in engaging with local companies to introduce new technologies, particularly environmentally friendly technologies, that will make a strong contribution to our goal of carbon neutrality by 2020,” Mifzal said.

“We are also confident that these technologies will result in a better quality of service to the people of the country at the most affordable price possible.”

Opposition

The government has previously come under fire for its privatisation plans.

In 2009, it was accused by the opposition DRP of using funds to the tune of US$20 million, allocated for tsunami relief on Meemu Kolhufushi and Thaa Madifushi, for purchasing the MWSC shares back from the Danish company.

DRP spokesman Ibrahim Shareef said “I don’t think this is a good idea at all, this money should have been used for the tsunami relief effort. Under the joint venture agreement, there is a buy back option for the Danish company, we didn’t have to buy back all the shares.”

Shareef said he thought the biggest problem with the deal was that all the shares were sold at the same price that the government bought them for.

“If they sold it at a premium it might have been a different story, and there wasn’t even an initial public offering.”

Transparency

Dr Mohamed Jameel Ahmed of the Dhivehi Qaumee Party, DQP, said he felt the deal was not transparent enough, had no regards for the impending privatisation bill, and questioned why the company was not open for public purchase.

“I don’t see the necessity of selling 20 per cent of a profitable company for US$16 million.”

Jameel said the deal seemed rushed and due to the lack of transparency, said he held a “strong suspicion [that there were] underhand deals”.

In addition, he said, “why was the deal rushed in a recessionary period as we would have got a better price if we had waited a few months?”

In response to these accusations, Mohamed Zuhair, the president’s press secretary, said “DQP is obviously an opposition party and they would refute governtment policy. We deny all allegations that the process is not transparent.”

Zuhair siad that the whole process was monitored through the privatisation committee, public private partnership, Invest Maldives and the ministry of finance.

Previously, the government sold seven percent of its shares in Dhiraagu to Cable and Wireess for US$ 40 million, a deal which was heavily criticised as many felt the deal was largely under valued.

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