Buyers Line Up for IKCO’s Block Sale at TSE Today

Tehran Stock Exchange is scheduled to witness a heated competition today, as a 15.85% controlling stake in Iran’s largest automaker is being put up for sale. Rumors about potential buyers are already running amok.

The sale includes more than 2.2 billion shares of Iran Khodro Company, including a 10% stake controlled by Samand Investment Company and 5.6% controlled by Negar Nasr Sahm Company, both subsidiaries of IKCO.

Total sale value stands at 9.76 trillion rials ($214 million), 28.26% of which will be sold in cash and 71.74% in installments over three years. Each share is to be sold at a base price of 4,034 rials (about 8 cents).

The two subsidiary companies first announced the block sale on Dec. 10, 2017 and aimed to go ahead with it in 10 days, but the process was delayed each time an announcement was made.

Bourse 24 claims that the share block currently has two groups of tenacious buyers awaiting its offering.

The first includes a group of Iranian expatriate investors. They reportedly acquired the required permits for investing in Iran from the Ministry of Economic Affairs and Finance and have been given the go-ahead by the Organization for Investment, Economic and Technical Assistance of Iran.

The primary obstacle to surmount, however, is proving their financial ability to the Securities and Exchange Organization. The issue was still being negotiated as of Tuesday, Bourse 24 reported.

The second group of potential buyers is a consortium of auto parts makers who already control a stake in Iran Khodro and the addition of 15.8% would increase their influence in the board. They, too, seem to be stuck in the purchase’s bureaucratic process.

Two of Iran’s largest automotive parts manufacturer, Crouse and Ezam, were part of the firms previously named as potential buyers. Having apparently been disqualified from the purchase by the authorities, they seem prone to join one of the two groups stepping forward, either individually or as a consortium.

IKCO, which is currently running multiple projects, says it plans to use most of the money raised through the sales to set up a shared platform for production of new domestically-made cars, Bourse Press quoted Hojjatollah Seyyedi, vice chairman of IKCO’s board of directors, as saying in December.