Approvals usher in first IPO wave

In an en banc meeting on Thursday, the Securities and Exchange Commission (SEC) gave its nod to the proposed maiden share placement of CHP and Golden Haven for P39.74 billion and P787.1 million, respectively.

The regulatory approval comes amid what analysts deemed as favorable market conditions.

CHP and Golden Haven are the second and third companies to receive SEC approval for their maiden equity offerings on the PSE. The two, however, will still require the local bourse’s nod.

SEC earlier green-lighted town center developer Philippine Primark Properties, Inc. to debut on the PSE. The company originally planned to launch its IPO in April.

Primark, CHP or Golden Haven could become the first company to go public this year. Three other companies have pending application for IPO with the SEC.

Meanwhile, Pilipinas Shell Petroleum Corp, a unit of Royal Dutch Shell Plc, has hired BPI Capital Corp and JP Morgan for a domestic initial public offering, IFR reported on Thursday, citing two sources close to the transaction.

The size and timing of the offer will be finalized soon, according to IFR, a Thomson Reuters publication.

The last company to join the stock market is real estate firm Italpinas Development Corp. in December. Integrated property and construction companies D.M Wenceslao & Associates, Inc. and Datem, Inc. have deferred their offers amid volatile market conditions.

GOOD TIDINGS
“We’re up right now. If they decide to list now, [the investor reception] would be positive,” AB Capital Securities, Inc. analyst Alexander Adrian O. Tiu said in a telephone interview, when sought for views on the possible timing of the IPOs.

DA Market Securities, Inc. chief equity analyst Nisha S. Alicer also said the market would take the IPOs, if done anytime soon, from Cemex and Golden Haven as positive tidings.

“They’re in industries that perform well,” Ms. Alicer said in a telephone interview, noting that CPH will particularly benefit from the ongoing infrastructure development in the country.

The local unit of Mexican cement and construction materials company Cemex S.A.B. de C.V. plans to issue 2,337,927,954 common shares for P17 each, according to a prospectus filed on June 1.

The company’s base offer comprises 2,032,980,830 shares, including 1,423,086,581 for investors living outside the Philippines. This comes with a stabilization option for 304,947,124 shares.

After the IPO, the company will have a total of 5,195,395,454 issued and outstanding common shares.

CHP intends to use the net proceeds, estimated to reach as much as P37.76 billion, to repay $504 million of a short-term loan with New Sunward Holdings B.V. for the acquisition of its operating subsidiaries.

Alternatively, the company would use the proceeds to settle debts incurred to refinance the short-term loan, which may include those owed to the domestic lead underwriter or principal shareholder.

CHP tapped Citigroup Global Markets Limited, The Hongkong and Shanghai Banking Corp. Limited, Singapore Branch and J.P. Morgan Securities PLC as joint book runners of the deal. BDO Capital & Investment Corp. will serve as the domestic lead underwriter of the IPO.

VILLAR’S BUSINESS
Golden Haven, meanwhile, plans to issue 74,117,647 common shares for P10.62 apiece.

The memorial park business of billionaire Manuel B. Villar, Jr. earmarked the proceeds for the company’s acquisition, growth and expansion strategies, particularly increasing the capacity of exisiting cemeteries, columbarium facilities and funeral homes.

According to the prospectus originally filed on April 1, Golden Haven hired Asian Alliance Investment Corp. as issue manager and lead underwriter for the proposed IPO.

Meanwhile, citing IFR, Reuters reported that banks had pitched the Pilipinas Shell deal at a valuation of $3 billion to $5 billion, indicating the refining company could raise $300 million to $500 million by selling the required minimum offer of 10%.

Pilipinas Shell, which operates one of the country’s two refineries, is required under a near two-decade-old local law to offer at least 10% equity to the public.

In March Shell’s local chairman, Edgar Chua, said the target was to launch the IPO within the second half of the year and that the size could be bigger than 10%.

 

Source: Bworld Online