Two days before the closing of Transgaz's offering, the large investor tranche is 26% oversubscribed and the small investor tranche is 95% oversubscribed. Brokers, however, expect the last day of the offering to see the highest amount of subscriptions, which means oversubscription could significantly increase.
The large investors placed large subscription orders yesterday during the initial public offering of natural gas transmission company Transgaz Medias (TGN), seeking to get a total number of over 800,000 shares worth a total of 155 million RON (44 million euros).
Yesterday, the tranche of the large investors that accounts for 60% of the offering had been subscribed 126%, compared with 12% on Tuesday.
The biggest subscription order placed on the large investor tranche thus far was for almost 270,000 shares worth 51.7 million RON (14.7 million euros), according to the brokers of the offering. Another investor subscribed 200,000 shares worth 38.4 million RON (10.9 million euros), with the rest of the orders staying below 100,000 shares.
"I believe many of the large investors will subscribe in the last day and I expect a high oversubscription rate," stated Adrian Manaila, head of Galati-based Eldainvest.
As far as the small investor tranche is concerned, oversubscription has reached almost 195%, with a total of more than 3,200 orders placed for 916,000 shares. The total value of the subscriptions of small investors stood at 175.8 million RON (50 million euros), and the average value of their subscriptions exceeds 15,000 euros.
All in all, the 1.8 million shares were subscribed on the two tranches, worth more than 98 million euros, 53% above the 1.17 million-share offering.
After the offering has closed, allotment of shares will be done separately for each tranche, and each investor will get a number of shares proportionate with the number of shares they subscribed. Transgaz's offering is the first in Romania to use allotment rights, whose actual trading will begin approximately three days from clearance. As a result, investors will no longer have to have their money frozen for two months until the shares are listed and will be able to turn their investment into cash as soon as this year. The trading of the allotment rights could begin sometime around December 19, 2007.
The allotment rights will be converted into shares, after the capital increase has been registered with the Central Depository, which will most likely happen in February.
An investor who receives 100 shares after the allocation and 100 allotment rights, for instance, will be able to sell their allotment rights when they start being traded on the Bucharest Stock Exchange, therefore losing their rights to get shares, or they will be able to wait until the allotment rights have been converted into shares.
An investor that did not get as much as they wanted to during the public offering will be able to buy allotment rights on the market to boost their stake.
The offering ends on Friday, December 7 at 1 p.m. Any order placed by investors after this deadline will not be taken into consideration.
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