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MAKATI
Finance Corp. (MFC), a listed company engaged in the
sale of various financial products and services catering
generally to consumer market, will offer up to 96
million common shares within the year to raise funds for
expansion of business portfolio.
In an
interview, chief finance officer Cynthia Gacayan said
the additional share sale would improve its public float
or ownership to about 36 percent. Currently, the company
has 89.99 million outstanding shares with a market
capitalization of P224.99 million.
She said
MFC would particularly expand its loan portfolio by
acquiring receivables of other financing companies.
“The
difference between us and the banks is we go to the
clients directly. The prospects are good,” Gacayan said.
While
the company did not elaborate on the details of the
additional share sale, it has approved the indicative
price range of 9.88 times to 13.48 times price/earnings
(PE) ratio as the basis for pricing the offer shares.
The
market has priced MFC at P2.50 per share at the end of
trading Thursday.
From
January to September 2007, the company reported a net
income of P9 million while net-interest income amounted
to P33.4 million.
Gacayan
said they expect to have ended 2007 with a full year net
profit of P20 million.
MFC was
incorporated in February 1966. In 2000, it formed a new
management team, which after thorough analysis of
operations decided to drop its less profitable product
lines.
As a
result, the company focused on three main loan products,
namely, consumer loans to medical professionals,
corporate loan via factoring of receivables, and secured
business loans. These were offered domestically, hence
there were no foreign sales. Also, no government
approval is needed for these products.
While
doing that, the management continued to implement
cost-cutting measures and imposed higher standards of
credit evaluation. These decisions eventually led to the
turnaround of the MFC’s operations in 2001. In 2004, the
total loan portfolio contributed 89 percent to income,
the rest mostly came from sale of acquired assets and
recovery of written off receivable via payment of
property.
In July
2005, motorcycle financing was introduced to further
diversify the company’s loan portfolio and spread the
risk from big factoring accounts and unsecured consumer
loans.
Its
business operations essentially involve sales and
marketing; evaluation and approval of loan applications;
and collection of loan accounts. |
