KARACHI, Dec 1: Twenty-four days after the group floated Initial Public Offering (IPO) of Rs132 in the WorldCALL Multimedia Limited, the subscription figures remain unannounced. Market folklore suggests that there has been considerable under-subscription.

KSE has already suspended provisional trading in the scrip. The earlier public offering of Rs540 million in equity by Fayzan Manufacturing Modaraba (not related in anyway to the group) had also been a debacle with the issue attracting just about Rs6.1 million or one per cent of the stock on offer. The issuers had also delayed the release of information for as long as they could. Beyond suspension of trading of the stock on the provisional counter, could the Exchange do more to ensure that companies asking for public money are quick to disclose the amounts they receive in subscription?

WorldCALL Payphones has summoned the Annual General Meeting (AGM) of shareholders on December 21 at the company’s registered office in Lahore. After the ordinary business of adoption of the financial statements for the year ended June 30, 2001; the approval of cash dividend at 15 per cent; and the appointment of auditors and determination of their remuneration, the meeting would take up the ‘special business’.

Such special business would include: the change of name of the company from WorldCALL Payphones Limited to WorldCALL Telecommunication Company Limited, with the approval, consent and acceptability of the name by the Securities and Exchange Commission of Pakistan in accordance with the provisions of Section 39 of the Companies Ordinance, 1984.

Next, it would be resolved that the chief executive of the company be authorized to take all necessary steps to make long term investments in the share capital of the following companies, in addition to investments already made in those companies, in accordance with the provisions of section 208 of the Companies Ordinance, 1984 and to disinvest such investments as and when considered appropriate. The companies and sums proposed to be invested include: WorldCALL Multimedia Limited — up to Rs30 million and WorldCALL Telecommunications Lanka (Private) Limited — up to Rs20 million. “This authority shall remain in force until revoked by the shareholders,” the proposal stated.

It would further be resolved that until any investment in the above mentioned investee companies was not translated into share capital of those companies, the investment by way of advances there against be subject to such mark-up rates as prescribed in clause (b) to sub-section (1) of section 208 of the Companies Ordinance, 1984.

WorldCALL Payphones had announced the company’s financial results for the year ended June 30, 2001 on November 25. The company posted after-tax profit at Rs158 million, which translated into earnings per share (EPS) of Rs3. Sales in terms of value grew 38 per cent. Analysts at Taurus Securities observed that on a quarterly basis, sales had been more or less consistent at Rs100 million. Analysts said that they had learnt from company sources that the recent spate of card payphone had resulted in increased competition. Moreover, abundance of calling cards had also, to some extent, reduced the appeal of payphones. Going forward, a repeat 40 per cent growth in year-on-year sales, analysts said, was unlikely to be achieved.

Operating margins for the year under review, declined by 400 basis points year-on-year to 37 per cent during the financial year 2001, signifying increased competition. Operating costs rose 48 per cent to Rs175 million, over the earlier year, which analysts attributed to higher costs related to an expanding telephone network and increased marketing expenditure. Financial charges at Rs16 million were in line with the company’s three quarterly performance.

Notwithstanding competition, the company was expected to post reasonable growth in revenue (10-15 per cent), which could yield firm earnings next year. At the ruling price of Rs13.45, the WorldCALL payphones’ stock was trading at an attractive 4 times the 2001 earnings of Rs3 per share.