Crown Asia Chemicals Corp., manufacturer of pipes and compounds, has allotted P93.7 million for capital spending this year from the net proceeds of its P222-million initial public offer (IPO).
It said in its final prospectus for the IPO it is allocating P24.7 million for the modernization of its plants for compounds (P12.26 million) and pipes (P12.52) as well as P63.4 million for working capital, which amounts to P93.7-million capital expenditures (capex) for 2015.
The 2015 capex will be sourced from the P203.98-million net proceeds of the IPO after expenses and taxes.
For the modernization of its existing compounds and pipes plants, the P24.7 million allotments this year comes lower than P63.4 million last year, but higher than P20.96 million in 2013.
This is because the budget this year will be spent for additional equipment compared to the improvement of facilities in 2014 in preparation for the maiden listing at the stock exchange.
With the P93.7-million capex, the company said it targets 8 percent to 10 percent growth in net income and revenues on doubled rated capacities by the second half of 2015, building of new PPR and HDPE manufacturing plants and warehouses, capitalizing on improved products to PPR pipes from the current GI pipes, as well as the continued growth in the real estate sector.
Crown Asia’s P222-million IPO will mark the bourse’s first listing this year, overtaking the anticipated P7.7-billion IPO of Company of Friends Inc. (ProFriends) and the P32-billion follow on offering of nickel miner Global Ferronickel Holdings Inc.
The offering of 158 million primary common shares — priced at P1.41 each — will run from April 10 to 17, which will later be listed at the PSE Main Board on April 27. Crown Asia is seen to have a market capitalization of P889.42 million, with an estimated 25.048 percent public ownership post-IPO.
Net proceeds of P203.98 million after listing-related charges and taxes will be used immediately after listing for the construction of its PPR and HDPE manufacturing plants and warehouse as well as purchase of equipment (P66.2 million); partial retirement of its P68.8-million loan with Security Bank Corp. (P43.8 million); modernization of its existing compounds and pipes plants (P25 million); and working capital purposes (P68.98 million).
Abacus Capital & Investment Corp. is the employed issue manager, arranger and underwriter of the maiden offer.
Crown Asia is a plastics compound producer based in Guiguinto, Bulacan, which manufactures and sells plastic compounds and synthetic resins for making construction materials such as tubes and pipes.
The company is owned by the Villanueva and Perez families who will later own a combined 74.95 percent stake in Crown Asia after IPO.
Other expected market debuts this year included the IPOs of ProFriends, Gweilo Corp. (P75 million) and Green Power Panay Philippines Inc. (P290 million); the follow on offering of Global Ferronickel (P32 billion); as well as the backdoor listings of National Book Store Inc. via Vulcan Industrial Mining Corp.