The Villar Group’s AllDay Marts Inc. has filed its registration statement with the Securities and Exchange Commission for its P6-billion initial public offering (IPO).
The company said it will sell some 6.85 billion unissued shares to be offered by way of primary sale, while the over-allotment option shares will comprise up to 685.71 million issued shares in secondary offering. The shares will be sold at an indicative price of P0.80 apiece.
The company engaged PNB Capital and Investment Corp. as the sole issue manager for the offer. BDO Capital and Investment Corp. and China Bank Capital Corp., along with PNB Capital, will serve as joint lead underwriters and joint bookrunners.
“We intend to use the net proceeds from the primary shares for debt repayment and capital expenditures and initial working capital for store network expansion,” the company said.
The company said it intends to pay off its high-cost debt amounting to P4.1 billion which was used primarily to fund its past and ongoing store network expansion.
“We believe that pursuing this strategy will increase the overall shareholder value of the company as this will decrease our financing cost by as much as P264.4 million per annum. Any balance of the net proceeds will allow us to partly fund our store network expansion. We believe, however, that we will still be able to access debt funding from our various relationship banks as the need arises in the medium-term.”
The company said it will pay off its loans from several banks that carry interest rates of between 5 percent to 8.08 percent. These loans were obtained to fund the capital expenditures and initial working capital of its 33 existing stores
These banks are Union Bank of the Philippines, which accounts for P1.67 billion; Philippine Business Bank, P900.4 million; Maybank Philippines Inc., P149.9 million; Security Bank Corp., P200 million; RCBC Capital Corp., P600 million; Bank of China (Hong Kong) Limited, P380 million; and Cathay United Bank Co. Ltd., P200 million.
The remaining proceeds of about 22 percent of the primary shares, will be used to fund the capital expenditures and as initial working capital for its store network expansion plan.
“As part of our store network expansion, we plan to have up to a total of 45 stores by 2022 and 100 stores by the end of 2026. The viability of a potential location for a new store is based on a number of factors, including the demographics of the area, the size of the population, its income levels, local government and local infrastructure and support, and, in particular, proximity to residential developments,” the company said.
The new stores planned up to the end of 2022 will be funded mostly from the net proceeds from the sale of primary shares. Out of the P1.19 billion of the net proceeds intended for store network expansion, some P710.9 million will be allotted for capital expenditures while P479.8 million will be set aside as initial working capital.
“As all of our stores are leased, we will not incur any expenses for construction. We do not have plans to acquire land,” the company said.
AllDay said it recorded a profit of P179.6 million in the first semester, 59 percent higher than the previous year’s P114 million.
Sales for the period rose 19 percent to P4.49 billion from last year’s P3.75 billion, the company said.