Eduardo Olbes, head of corporate and investment banking at Security Bank Corp., said in a chance interview that market conditions abroad remain a key indicator as to whether the initial share sale will push through within 2011.
“Market conditions are very poor offshore but onshore they are actually okay. The go or no go decision will be made in the middle of October on the presumption that we get PSE [Philippine Stock Exchange] approval by then,” he said.
SB Capital Investment Corp., the investment-banking unit of Security Bank, is one of two domestic underwriters tapped to handle what could be the Philippines’ biggest IPO.
The Securities and Exchange Commission (SEC) already approved SMC Global Power’s IPO filing last week, in which the company outlined plans to sell as many as 519.75 million primary and secondary shares at an offer price of up to P71 each, including upsize and overallotment options.
The IPO would help fund P90.4 billion worth of new power projects in Cavite, Leyte, Bulacan and Davao through 2016, documents filed with the SEC showed.
SMC Global Power’s IPO comes at a difficult time with other Philippine companies already adjusting plans for their initial share sales mainly on Europe’s ongoing sovereign-debt problems and worries that the global economy is stalling.
Supermarket chain Puregold Price Club Inc., which is making its trading debut on October 5, enjoyed strong demand overseas in part because the offer price was set at bottom of its indicative range, or P12.50 each, to raise at least P7.5 billion.
The domestic component was “fully covered” as of Friday, Eduardo Francisco, president of BDO Capital and Investment Corp., said last week.
“Overseas demand higher but domestic also covered,” Francisco said via text message.
On Friday electronics maker Cirtek Holdings Philippines Corp. deferred its P660-million IPO scheduled this month, citing poor market conditions.
SMC Global is maintaining the base offering of 290 million to 385 million common shares to be sold at a maximum offer price of P71 each to raise up to P27.34 billion. Up to 288.75 million will be primary shares and 96.25 million will be secondary shares held by parent firm San Miguel Corp.
SMC Global also included a domestic upsize option for 58 million to 77 million shares (with a 50-50 split between primary and secondary shares), which could add P5.47 billion to the offer.
It, likewise, included an overallotment option of 43.5 million to 57.75 million secondary shares valued as much as P4.1 billion.
