Posted on 09:06 PM, January 04, 2011 [ BusinessWorld Online ]
GOTIANUN-LED holding firm Filinvest Development Corp. will conduct a follow-on offering involving the sale of as much as 2.88 billion shares later this month.
Fresh capital from the share sale will allow the listed company to bankroll new and existing projects and repay debts, the company told the local bourse yesterday.
The move is also in compliance with the minimum 10% public ownership required by the Philippine Stock Exchange (PSE).
The firm did not disclose the price of the share sale. Shares in Filinvest Development closed P0.10 lower at P5.10 apiece yesterday.
“[Filinvest Development yesterday] launched a follow-on equity offering of up to 2.5 billion shares with an additional 15% over-allotment option,” the company said in a disclosure.
“The primary offering will involve the sale of Filinvest Development shares by ALG Holdings Corp. and a simultaneous subscription by ALG Holdings of an equivalent number of shares to be issued by Filinvest Development,” it added.
ALG Holdings controls Filinvest Development. In November, shareholders approved the increase in the authorized capital of the holding firm to P17 billion from P10 billion.
“Total proceeds from the [sale of] Filinvest Development shares will be used for land and hospitality business development, [increased capitalization of the banking business], investment in the infrastructure and utilities business, and debt repayment,” the firm said.
Last month, Filinvest Development said it would enter the infrastructure and utility businesses. The holding firm is looking at building two 150-megawatt, coal-fired power generation plants in Luzon and the Visayas and a water desalination facility in the Visayas.
“The Filinvest Development management will embark on a two-week global investor road show beginning Jan. 5 and the transaction is expected to be completed by end of January,” the holding firm said.
Filinvest Development has tapped UBS AG as the sole global coordinator as well as joint bookrunner in tandem with JP Morgan Securities Ltd.
With the share sale, the firm’s public float will rise to 29.5% from yesterday’s 7.7%.
On Nov. 29, the PSE started implementing the 10% minimum public float rule as a requirement for continued listing.
A listed company that does not meet the prescribed minimum percentage of public ownership will be given a grace period of 12 months to comply. Erring firms will be slapped with penalties. Listed companies that do not comply after a three-year period will be suspended from trading and could be delisted.
The financial business of Filinvest Development includes newly acquired subsidiaries AIG Philam Savings Bank, Inc., Philam Auto Finance and Leasing, Inc., and PFL Holdings, Inc., whose mergers with East West Bank were approved by the Bangko Sentral ng Pilipinas and the Securities and Exchange Commission last year.
As of end-September, the group had deposit liabilities of P55 billion and long-term debt of P26.4 billion.
Property subsidiaries and joint ventures include listed Filinvest Land, Inc., Festival Supermall, Inc., Cyberzone Properties, Inc., and Filinvest Asia Corp.
Filinvest Development is also into sugar production through Pacific Sugar Holdings Corp., Davao Sugar Central Co., Inc., Cotabato Sugar Central Co., Inc., and High Yield Sugar Farms Corp.
The firm’s consolidated net income jumped by 94% to P1.9 billion in the first half of 2010 as property unit Filinvest Land, Inc. reported an uptick in revenues. -- Neil Jerome C. Morales