Synergy Grid and Development Phils Inc., which controls the sole operator of the country’s power transmission lines, on Tuesday said the Securities and Exchange Commission (SEC) has given its go-ahead for the company’s follow-on offering (FOO).
The company also slashed its offering to P12 per share, from its indicative price of P15 to P25 apiece. This translates to about P13.84 billion in proceeds based on the number of offer shares.
The company is selling 1.05 billion in primary common shares, and 101 million in overallotment option, which is also its secondary offering, from the ownership of Henry T. Sy Jr. and Roberto G. Coyiuto Jr.
“The SGP FOO was priced at a very attractive level. The FOO provides everyone with an avenue to invest in NGCP, the sole concession holder of the country’s power transmission backbone. By participating in the FOO, we become long-term partners in supporting the country’s growth and development,” Sy, the company’s chairman, said in a statement.
“SGP’s follow-on offering is a unique opportunity to invest in NGCP and become a stakeholder in an asset of national importance. The Philippine power transmission grid will be crucial as the country’s economic recovery and growth will be underpinned by power,” Coyiuto, the company’s vice chairman, said.
The public offer period started on Tuesday and will run through November 2. The listing date of the shares on the Philippine Stock Exchange will be on November 10.
The maximum subscription amount for local small investors who will participate in follow-on public offering is set at P1 million.
The company will use the proceeds of the follow-on offer to directly subscribe to non-voting preferred shares that will be issued by National Grid Corp. of the Philippines, the sole and exclusive operator of the Philippines’s transmission network, linking power generators and distribution utilities to deliver electricity to end-users nationwide.
NGCP shall utilize the proceeds from the issuance of the non-voting preferred shares to finance its capital expenditure requirements and related cost and expenses. In the next 13 years, NGCP is committed to invest approximately P440 billion across 211 projects which will support the growing electricity demand in the country and to make the country’s power backbone continuously reliable.
BofA Securities and UBS are joint global coordinators and joint bookrunners. BDO Capital is sole domestic coordinator, and is also joint domestic underwriter and bookrunner together with BPI Capital Corp. and PNB Capital Corp.
The company, jointly owned by Sy and Coyiuto, through their respective companies OneTaipan Holdings Inc. and Pacifica21 Holdings Inc., exercises control over 60 percent of the outstanding capital stock of NGCP.
Since May, the company’s shares at the Philippine Stock Exchange was suspended for trading after its free float level fell to 0.25 percent following the consolidation of the shareholdings of Sy and Coyiuto.
Synergy Grid shares were last traded at P395.80 apiece on May 28.
The follow-on offer will increase its free float level at 20 percent, or the same level as the minimum public float requirement of the PSE.
On August 10, the SEC has approved the company’s application to increase its capital stock to 5.3 billion common shares from 5.05 billion common shares, or an increase of 250 million common shares.
The firm shares will be issued out of Synergy Grid’s unissued common shares, of which 900.13 million are part of its unissued authorized capital stock while the remaining 153.35 offer shares will be issued from the capital increase. The rest will come from the holdings of the two majority owners.
Assuming the over-allotment option has been exercised, Sy’s holdings at Synergy Grid will be reduced to 39.95 percent from 49.93 percent, while Coyiuto’s ownership will decline to 39.85 percent from 49.81 percent.
Synergy Grid posted an attributable income of P5.01 billion in the first half, down by half from last year’s P9.93 billion. Revenues for the period, meanwhile, fell to P24.18 million from last year’s P48.6 million.
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