July 26, 2019 | 12:31 am [ bworldonline.com ]
By Arra B. Francia
Senior Reporter
PROPERTY developer Kepwealth Property Philippines, Inc. (KPPI) could be the first company to go public this year, after it bagged final approval to raise up to P384.77 million at the stock exchange.
In a notice on its Web site on Thursday, the Philippine Stock Exchange, Inc. (PSE) said it has approved KPPI’s plan to issue up to 67.032 million common shares priced up to P5.74 each in its initial public offering (IPO).
“It may have taken some time before we had our first IPO but I am pleased that KPPI is embarking on its maiden share sale,” PSE President and Chief Executive Officer Ramon S. Monzon said in a statement. “I hope that this move will encourage other companies that pushed back their IPOs to revisit their plans and consider the stock market as an avenue for capital raising.”
The PSE’s approval comes after the Securities and Exchange Commission (SEC) en banc also cleared the company’s application during its meeting last Tuesday, July 23.
KPPI will set the final offer price on Aug. 1, with the offer period scheduled to run from Aug. 5 to 9. The shares will then be listed on Aug. 19 under the ticker “KPPI” on PSE’s small, medium and emerging board.
The company will have a public float of 33.34% upon listing and market capitalization of P1.154 billion.
KPPI expects P363 million in net proceeds from the offer which will be used for acquisition of about 3,500 square meters (sq.m.) of leasable office space. The company will have about 18,121 sq.m. of leasable space after the acquisition.
Office spaces to be acquired are located in Quezon City, Pasig City and Makati City worth P245 million from the first to second quarter of 2020. Office spaces in Davao worth P120 million will also be acquired in 2020’s second quarter. “The company believes these properties will reduce the concentration risk of its current operations in Cebu City and will create additional recurring revenue streams once these assets are leased out to tenants,” KPPI said.
KPPI tapped BDO Capital and Investment Corp. as the transaction’s sole issue manager, underwriter and sole bookrunner.
Incorporated in 2005, KPPI is involved in development and management of office, commercial, agricultural and residential properties, including hotels, inns, resorts and apartments.
The company currently owns 77 office condominiums with 98 leasable spaces in Kepwealth Center, a commercial building in Cebu Business Park, Cebu City.
It also manages commercial, office and residential units in several buildings in Metro Manila, including six units in Oxford Suites, 79 units in Medical Plaza Ortigas, and 91 units in Burgundy Corporate Center.
It also has 59 units in Burgundy West Bay Tower, 43 units in Atrium Mall, 98 units in Icon Macapagal, and 29 units in Vivaldi Residences-Cubao Commercial Space.
Sought for comment on the company’s prospects, Regina Capital Development Corp. President Marita A. Limlingan highlighted the location of most of its properties.
“Kepwealth Property is a player in the office industry in Metro Cebu — which, according to third party property consultants, is currently experiencing record surges in demand from the POGO and BPO industry,” Ms. Limlingan said in a text message, referring to Philippine offshore gaming operators and business process outsourcing.
“All developers based around that area, including Kepwealth, are expected to benefit from the strong performance of the sector overall.”
KPPI may be the first company to go public this year, amid a number of applications that are also lined up at the SEC. Other companies that have intend to conduct an IPO this year are coconut product manufacturer Axelum Resources Corp. (P7.7 billion) and Villar-led All Home Corp. (P20.7 billion).
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