At midday, the Oiltanking shares retreated from the morning high to $23.61, up $2.11 or 9.81% from the IPO price. Oiltanking launched a public offering of 10 million common units representing limited partner interests priced at $21.50 per unit, aiming to raise close to $250 million.   
In early July, the company had previously estimated the IPO price at $19-$21 per share. The common units are trading under the ticker symbol “OILT.” The underwriters have been granted a 30-day over-allotment option to purchase up to an additional 1.5 million common units. The offering is expected to close on Tuesday, July 19.   
Upon conclusion of the offering, the public will own a 25.2% limited partner interest in Oiltanking Partners, or a 29.0% limited partner interest if the underwriters exercise their over-allotment option in full.   
Industry sources told OPIS in April that the private logistics company, which has a vast global operations stretching from Asia to Europe to the U.S., chose the U.S. for its IPO because it could avoid double taxation and it could get a favorable valuation for its IPO, and it could raise capital efficiently in this equity market. Also, the capitalization of $200 million appears to be small, considering the charges of a few million dollars to be paid to investment banks for the IPO. The registration fee for the IPO was $23,220. The capitalization value could rise significantly beyond the $200 million estimate if the company stock receives favorable price valuation and the IPO is oversubscribed.
Oiltanking is expected to receive estimated net proceeds of about $183 million from this offering after deducting the estimated underwriting discount and offering expenses. The proceeds will be used to repay intercompany indebtedness owed to Oiltanking Finance B.V. in the amount of about $119.5 million. Also, the IPO will reimburse Oiltanking Finance B.V. for about $7.1 million of fees incurred in connection with our repayment of such indebtedness. Oiltanking will make a distribution to Oiltanking Americas in the amount of$33 million and provide the company with a working capital of $23.4 million.   
According to the IPO filing, Oiltanking has an annual revenue of $29.955 million and net income of $7.62 million.   Total asset value is at $304.97 million, and stockholders’ equity is at$111.687 million. Oiltanking’s core assets are located along the upper Gulf Coast of the United States on the Houston Ship Channel and in Beaumont, Texas. Its 12.1-million-bbl Houston terminal stores 64% crude, 26% heavy petrochemical feedstocks, 7% clean products and 3% fuel oil. Its 5.7-million- bbl Beaumont terminal stores 59% clean products, 40% vacuum gasoil and 1% fuel oil. The company’s cash flows are primarily generated by fee-based storage, terminaling and transportation services that it performs under multi-year contracts with its customers.