Kina goes public

KINA Securities is launching an initial public offer to raise K202 million ($A97 million) and create a dual listing on the Port Moresby and Australian stock exchanges, scheduled for July 30.
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The funds are to be used for the acquisition of Maybank PNG - the Papua New Guinean operations of Malaysian financial and banking group Maybank , and future working capital requirements. This is, in essence, a reverse takeover because Maybank is the major shareholder in Kina Securities.

The company is offering 97 million fully paid ordinary shares at K2.08 ($A1) with a market capitalisation of K341 million ($A164 million).

The offer is made up of 76.6 million shares to be issued by Kina Securities and the sale of 21.6 million shares by its major shareholder Maybank, which will keep 35% of Kina's issued share capital on listing.

CEO Syd Yates said the move would boost Kina's strategy of diversification, which he hoped would increase its client base and put it in a position to offer new financial products.

"We believe there will be opportunities to achieve synergies post-integration of Maybank PNG in the 2016 and 2017 financial years, combined with continued growth in our core banking and wealth management businesses, in addition to cross selling opportunities," he said.

Yates added that the company offered investors "broad exposure" to the PNG economy, in particular resources and agriculture, and that Kina was well placed to capitalise on the increased demand from corporate clients, small and medium enterprise, and the middle class for banking and financial services.

"PNG is presently experiencing its longest period of economic growth since independence, with GDP forecast to grow by 15% in 2015, according to the latest Asian Development Bank forecast," he said.

Kina has also appointed ex-Suncorp Bank CEO David Foster as a non-executive director as part of the IPO process.

Chairman Rabbie Namaliu said: "The acquisition of Maybank PNG, and our listing on the ASX and PoMSOX are significant milestones for our company, which will generate exciting growth opportunities for the business across our wealth management and banking operations" .

A strategic refocus towards the Chinese and ASEAN markets prompted the decision by Maybank to sell off its PNG assets.

Maybank CEO Datuk Abdul Farid Alias said those markets were where the bank could get the best returns for its investments.

"While we have been operating profitably and successfully in Papua New Guinea over the years, we have had to evaluate how best we can use our capital going forward, especially in light of new and more stringent requirements under the Basel III regime," he said.

"Ultimately, we believe that we can achieve greater value creation for all our stakeholders by re-focusing our resources in the ASEAN and Greater China region."

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