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Friday, March 29, 2024

Eagle Cement’s IPO highly oversubscribed

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The P8.6-billion initial public offering of Eagle Cement Corp., a local cement manufacturer led by businessman Ramon Ang, was more than three-times oversubscribed at the end of the offer period, one of the underwriters handling the transaction said Thursday.

“The excellent takeup is a testament to the market’s belief in Eagle’s sound financials and aggressive expansion plan which comes amidst the increasing infrastructure spending in the country,” China Bank Capital Corp. managing director Virgilio Chua said in a statement.

Apart from the government’s plan to upgrade and build more public infrastructure, the continued boom in the real estate market and the expanding tourism sector bolstered interest in Eagle’s IPO in anticipation of the expected increase in cement demand.

Industry estimates showed Philippine cement consumption was expected to reach 39 million metric tons by 2022, up from 26.7 million tons in 2016.

The underwriters said Eagle’s strong fundamentals, efficient production lines and strong brand equity in Luzon also contributed to the investors’ positive response on the company’s maiden share offering.

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Priced at P15 per share, Eagle plans to sell 500 million common shares by way of primary offer with an over allotment option for another 75 million secondary shares. 

The shares will be listed under the main board of the Philippine Stock Exchange on May 29.  Eagle is the second company to conduct an IPO this year after Wilcon Depot Inc.

Eagle’s IPO is also considered the biggest purely domestic public offering.

Other underwriters of Eagle cement IPO were PNB Capital and Investment Corp. and SB Capital Investment Corp.

Eagle earlier said production capacity would likely reach 7.1 million metric tons by January 2018 with the completion of a third production line in Bulacan.  Using proceeds from the IPO, Eagle will also build a new cement plant in Cebu with a production capacity of 2 million MT.

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