Iran's Pasargad mulls $330mn IPO of energy unit

Company's top official says the IPO could take place in the current Iranian year, which ends March 2017, "or latest, next Iranian year," adding the listing may raise about 10tn Iranian rials or $330mn

The listing may help PEDC raise about 10tn Iranian rials or $330mn.
The listing may help PEDC raise about 10tn Iranian rials or $330mn.

Pasargad Financial Group, owner of Iran’s second-largest bank, is weighing the sale of shares in its energy unit as the removal of sanctions boosts confidence in the economy.

“We’ll likely IPO some of our companies this year, like PEDC,” Majid Ghassemi, chairman of Pasargad Energy Development Co. and CEO of Pasargad Bank, recently told Bloomberg in an interview in Zurich, Switzerland, where he was attending a conference on investing in Iran.

The IPO could take place in the current Iranian year, which ends March 2017, “or latest, next Iranian year,” he said, adding the listing may raise about 10tn Iranian rials or $330mn, through a sale on the Fara Bourse - Iran’s junior market.

PEDC is involved in oil and gas exploration as well as refining. The company is working on approximately $12bn of energy projects, including the construction of a $2.2bn gas line to neighbouring Iraq, Ghassemi said.

Iran, the second-largest economy in the Middle East, is now able to boost oil exports and reconnect its banks to the global financial system after a decade of economic and political isolation.

Foreign companies and investors are scoping the market of 78mn people for opportunities after the lifting of sanctions in January. Since then stock market has increased by around 30%.

The group may also sell some of the shares of companies under its Middle East Mines Industries Development Holding Co., Ghassemi said. It still needs to get licenses for the listing of its companies on the Tehran stock exchange, he said.

Pasargad, one of 19 privately-owned banks in Iran, increased assets by 14% in 2015 to 505tn Iranian rials ($16.6bn). The lender is seeking to become a ‘global bank’ and create an international network by opening new branches, initiating joint ventures with local lenders and through acquisitions, Ghassemi said. Europe is the priority and the bank is considering the UK, France, Switzerland and Spain, he added.

“We’ll focus on whichever country can answer our needs,” Ghassemi said.

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