Friday 17 August 2018

IPL Plastics in buyback to alleviate sell-off fears

In addition to the share buyback, shareholders will not be able to trade their shares on the Canadian stock market for the first six months after the listing (stock picture)
In addition to the share buyback, shareholders will not be able to trade their shares on the Canadian stock market for the first six months after the listing (stock picture)
Samantha McCaughren

Samantha McCaughren

IPL Plastics, the company formerly known as One51, included a CAD$50m (€32m) share buyback in plans for its Canadian stock market listing to alleviate the concerns of its underwriters that its 2,000 Irish shareholders could rush to sell their shares.

Any large sell-off after the flotation could destabilise the share price.

In order to reduce the chances of this happening, the company included a number of measures to ensure an orderly sell-off.

Market sources described it as a "structural lock-up". Participation in the buyback is expected to be low.

In addition to the share buyback, shareholders will not be able to trade their shares on the Canadian stock market for the first six months after the listing.

However, the shares will trade on the grey market and mirror the price traded on the official market.

Irish investors control 57pc of the company and this will reduce to 45pc in the IPO.

It is very unusual for any company listing on the stock market to have such a large shareholder base.

The listing is expected to happen in late June. Scheme of arrangements documents will be circulated this week and an initial prospectus will be filed in late April.

A final prospectus will be filed in late May after the company's AGM and management is expected to go on a roadshow in the first two weeks of June.

Sunday Indo Business

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