(Source: BusinessWorld, by Krista A.M. Montealegre | Aug. 10, 2015)
In a prospectus filed with the Securities and Exchange Commission (SEC) yesterday, the Gaisano-led multi-format retailer said it is generating up to P5.61 billion from the issuance of up to 920 million shares at a maximum price of P6.10 apiece.
Key shareholders Valueshop Stores, Inc. and Vicsal Development Corp. can sell an additional 92 million shares to cover the over-allotment option. Proceeds of P561.20 million from the issuance of secondary shares will go to the selling shareholders and not to the company.
The company will have 3.44 billion shares outstanding after the offer.
A portion of the primary shares will be sold to cornerstone investors, the prospectus showed.
Depending on when Metro Retail secures the necessary regulatory approvals, the final price will be set on Oct. 29 with the offer period targeted to run from Nov. 2 to 6. The shares will be listed on the Main Board of the Philippine Stock exchange on Nov. 12.
BPI Capital Corp. and Deutsche Bank A.G., Hong Kong Branch were tapped as joint global coordinators and lead underwriters.
Net proceeds of P5.289 billion from the primary offering will be used for the expansion of store network (P3.755 billion), logistics and distribution center (P1.216 billion), and working capital requirements (P317.3 million).
Metro Retail opened its first store in Cebu City in 1982 and focused on steady growth in the Visayas during the first two decades of its operations. It launched an expansion campaign in 2010 that increased the company’s store network from 16 to 45 with a total net selling space of approximately 197,873 square meters at end-June.
The company has nine stores in Metro Manila, 10 stores in other parts of Luzon and 26 stores in the Visayas.
Next year, Metro Retail plans to open at least seven new stores, including department stores and supermarkets in Bacolod and Iloilo under arrangements with Ayala Land, Inc. and Megaworld Corp., respectively.
In addition, the company has identified 30 sites for expansion across the Philippines in the next three years and is seeking out opportunities to acquire existing retail stores and consolidate them under the Metro brand name.
Citing data from Euromonitor, Metro Retail is the third largest operator of supermarkets and department stores, and the fourth largest operator of hypermarkets in terms of retail sales value in 2014.
In the Visayas, the company is the largest department store and hypermarket operator, and the second largest supermarket operator.
In Cebu alone, it is the largest retailer across those three formats.
In the first half, Metro Retail grew its net income by 21.1% to P211.3 million from P174.4 million, as revenues climbed 14.3% to P14.73 billion from P12.88 billion.
Last year, the company posted a net profit of P628.9 million, higher than the P613.5 million in 2014.
Metro Retail joins a growing list of IPO hopefuls D.M. Wenceslao & Associates, Inc. (P21.7 billion), Italpinas Development Corp. (P242 million); Gweilo Corp. (P95 million); Philstocks Financial, Inc. (P190 million); and Green Power Panay Philippines, Inc. (P290 million).
So far, only two companies — Crown Asia Chemicals Corp. and SBS Philippines Corp. — have debuted on the stock exchange this year.
Article Link: http://bworldonline.com/content.php?section=Corporate&title=gaisano-led-retail-giant-seeks-to-raise-p6.17-b-from-ipo-this-year&id=113213