Cemex Holdings Philippines Inc., a unit of Mexican cement giant Cemex S.A.B. de C.V., will raise as much as P25.1 billion in proceeds from an initial public offering after pricing its shares at P10.75 apiece.
Cemex priced the IPO 36.8 percent lower than the maximum indicative price of P17 earlier set by the company.
“We are delighted by the strong participation that we have received from institutional investors for our IPO notwithstanding events in Europe. We take this as a sign of the investors’ confidence in the long-term prospects of CHP and, more importantly, the Philippines as a whole,” Cemex Philippines chairman and president Pedro Jose Palomino said.
Despite the slash in the offering price, Cemex Holdings’ maiden share offering will still be one of the biggest IPOs in the country this year.
“We are truly proud to be a part of this IPO. The ability to price and launch the deal amidst volatility is a testament to the strong fundamentals and growth prospects of the company. Retail investors can take the cue from the strong institutional demand and should take a look at the offer,” Eduardo Francisco, president of BDO Capital & Investment Corp, which serves as the domestic lead underwriter, said.
Francisco said the deal was oversubscribed even without orders from trading participants and local investors.
Cemex Holdings, which is expected to benefit from the construction boom on sustained growth of the domestic economy, is selling 2.032 billion common shares with a stabilization option of 304.947 million common shares.
The offered shares represent 45 percent of the company’s capital stock.
The company plans to use the proceeds from the IPO to pay debt owed to a subsidiary of CHP’s ultimate parent company. It will also pay the debt used to refinance a previous debt owed to the subsidiary of CHP’s ultimate parent company.
The shares are expected to begin trading on the Philippine Stock Exchange on July 18, 2016 under the ticker symbol “CHP.”
Citigroup Global Markets Ltd., The Hongkong and Shanghai Banking Corporation Ltd., Singapore Branch and J.P. Morgan Securities plc are acting as joint global coordinators and joint bookrunners,
Cemex Holdings is one of the leading cement producers in the Philippines, based on installed annual capacity. It produces and markets cement and cement products, such as ready-mix concrete and clinker, in the Philippines through direct sales using its extensive marine and land distribution network.
Cemex Holdings will be the second company to conduct an IPO this year, following the successful offering of memorial parks developer Golden Haven Memorial Parks Inc.