ICI to split paint business

Karachi, June 06, 2012 (PPI-OT): ICI Pakistan Ltd. has notified that the shareholder of ICI as per existing structure as at June 27, 2012 will be entitled for the split shares of ICI and Akzo Nobel.

According to Alfalah Securities Limited, in this regard, the book closure date is scheduled from June 21, 2012 to June 27, 2012 and the trading of shares of ICI will be suspended from June 21, 2012 on the bourses. After completion of the regulatory procedure, the trading of split shares of ICI and Akzo Nobel will commence from the mid of July, 2012.

This is in context of the reconstruction of ICI Pakistan where its paint business would be separated from ICI. AkzoNobel, holding 75.81% (105.23 million shares) of ICI through its subsidiary ICI Omicron, has decided to separate the paints business from ICI and form a new company named “AkzoNobel Pakistan”. AkzoNobel intends to preserve ICI’s paint business and form a separate entity, primarily due to its proven managerial record in the paints manufacturing industry. AkzoNobel would split the paid capital of PkR 1,388.023 million into PkR 923.59mn of ICI Pakistan and PkR 464.43 million of AkzoNobel Pakistan which means that the shareholders would be allotted 33.46% shares of AkzoNobel Pakistan while they would possess 66.54% shares of ICI Pakistan after its reconstruction. The breakup value of ICI Pakistan currently stands at PkR 104.85 per share (as at Mar 31, 2011). The stock is currently trading at a CY11 P/B and P/E multiple of 1.29 and 24.45 times respectively. Therefore, Alfalah Securities Limited maintains a Hold stance on the stock.

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