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Strong demand seen for DoubleDragon share sale

Posted on March 29, 2016 10:07:00 PM
By Krista Angela M. Montealegre, Senior Reporter

DOUBLEDRAGON Properties Corp. enjoyed robust demand for its convertible preferred shares, as the real estate developer priced the high-yielding securities at the bottom of the range.

DOUBLEDRAGON Chairman and Chief Executive Edgar J. Sia II -- BW FILE PHOTO

DoubleDragon kicked off yesterday a plan to raise up to P10 billion from the sale of preferred shares, pegging the dividend rate at 6.4778% per annum -- the bottom end of the indicative range, the company said in a disclosure to the stock exchange yesterday.

The rate was 200 basis points above the simple average of the seven-year benchmark rates for the three consecutive days preceding pricing date, DoubleDragon said.

Demand reached over P26 billion at the low end of the price range, which is five times the base offer, the company said.

“[There is] strong demand because of very liquid market, attractive dividend rate, and good credit of DoubleDragon,” Jose Luis F. Gomez, president of RCBC Capital Corp., said in a mobile phone message yesterday.

Holders of the preferred shares may convert them to DoubleDragon’s common shares at a rate of one preferred share with a par value of P100 per share to one common share from the second to the fifth anniversary of the issue date, according to the registration statement.

Proceeds from the share sale will be mainly allotted for the development of its community mall chain under the brand CityMalls; DD Meridian Park, a 4.8-hectare (ha) mixed-use development in Pasay City; the Jollibee Tower, the future headquarters of the Jollibee group in Ortigas; and the Skysuites Tower, a 38-storey commercial, office and residential skyscraper at the corner of EDSA and Quezon Avenue.

“We think that the strong demand is due to the trusted confidence with the company’s ability to plan and execute its set goals,” Hannah H. Yulo, DoubleDragon chief investment officer and senior vice-president for corporate finance, said in a separate mobile phone message.

Prior to its initial public offering in 2014, DoubleDragon has announced its intention to develop 1 million square meters of leasable space. So far, the company has secured over two-thirds of the land bank to attain its target.

DoubleDragon plans to open 25 CityMalls a year, allowing the company to reach its 100-store goal by 2019 -- a year ahead of its 2020 target.

DoubleDragon is a joint venture between Injap Investments, Inc. of Edgar “Injap” Sia II and Honeystars Holdings Corp. of Tony Tan Caktiong, chairman and founder of Jollibee Foods Corp.

Shares in DoubleDragon lost 35 centavos or 0.89% to close at P39.10 each on Tuesday.

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