May 6, 2003	Tuesday	Rabi-ul-Awwal 3, 1424

KARACHI, May 5: The Federal Minister for Information Technology and Telecommunication, Awais Ahmad Khan Leghari, on Monday called upon financial institutions and corporates to put to best use their excess liquidity by investing it in IT and telecom sectors so that more jobs could be created.

The minister was speaking as chief guest at a ceremony, held to announce the Initial Public Offering (IPO) of TRG Pakistan Limited — a company, which claims to be the largest IT- enabled services company in the country.

Leghari reiterated that his ministry had prepared a telecom policy, aimed at attracting more investment in the sector, which was being sent to the Cabinet for approval. “It is important that the corporate sector is encouraged and incentives are provided to them so that more companies like TRG may come up for investment in these sectors,” the minister said.

The TRG Pakistan Limited is scheduled to enter the capital market through the IPO on May 7 and 8 with offer of Rs200 million worth of equity to the general public. According to the sponsors, the fully underwritten offering has been preceded by Rs400 million private placement.

Earlier, Zia Chishti, Chairman and Chief Executive Officer of TRG Pakistan, giving details about the operations of the company, said that TRG was a venture capital company providing offshore service facilities mainly in the area of call centre business.

He said TRG was the first Pakistani acquisition vehicle having a paid-up capital of Rs720 million. “This IPO marks the largest equity financing raised to date by an IT-based services firm in the country,” he added.

He said Jahangir Siddiqui & Co had acted as financial adviser to the issue, while lead managers for this IPO were United Bank Limited, National Bank of Pakistan, Habib Bank Limited, AKD Securities, Jahangir Siddiqui & Co and Khadim Ali Shah Bukhari & Co. The financial adviser said the underlying concept of this business revolved around the principle of labour arbitrage between the US and Pakistan and focussed on acquiring US telephone answering services and call centres and shifting their service delivery to low cost off-shore facilities in Pakistan.

“The significant differential in wage rates between Pakistan and US provides considerable margin for the operators. Secondly, the shifting of services from the US to Pakistan has been complemented by the recent progressive reduction in bandwidth rates in the domestic telecom sector making the shifting of calls between the two countries feasible.”

He said the bulk of funds raised by TRG Pakistan would be deployed in the venture project TRG International, a wholly owned subsidiary incorporated in Bermuda. It would use these funds to acquire US based call centre companies and in the establishment of offshore infrastructure in Lahore that would provide services to companies acquired by the TRG International.

Investors at the Karachi Stock Exchange appear to have given a positive response to the first offering of a new equity this calendar year. On Monday, the 10-rupee share in the company closed at Rs14.50, up by Re1 on 1.117 million shares, on the provisional counter.