JG Summit raises P12B; RRHI eyes P40 billion


The Gokongwei-led JG Summit Holdings Inc. has raised around approximately P12 billion from the sale of 105 million shares of Universal Robina Corp. (URC), the group’s brand food product unit, at a price of P115 each share.

Another Gokongwei-led firm, Robinsons Retail Holdings Inc. (RRHI), is eyeing P40 billion from an initial public offering (IPO).

In a filing with the Philippine Stock Exchange (PSE) on Friday, JG Summit disclosed that it sold 105 million URC ordinary shares via an accelerated overnight equity placement at a price of P115 each, representing a 6.5-percent discount to the previous closing price.

After the sale, the listed conglomerate will continue to hold 55.7 percent in URC as the issuer, the disclosure added.

The share sale raised approximately P12 billion for JG Summit, with proceeds programmed for general corporate purposes.

Credit Suisse (Singapore) Ltd. acted as sole bookrunner for the share sale.

Considered as the newest party involved in San Miguel Corp.’s divestment from the Manila Electric Co., JG Summit announced days ago that it will purchase the entire stake of SMC in the country’s largest power distributor for P72 billion.

“JG Summit intends to finance the acquisition with a combination of debt and equity capital,” JG Summit said in a previous disclosure to the PSE.

Meanwhile, in an earlier Bloomberg report, URC said that it intends to beef up its capital spending for the fiscal year 2014 to a record $150 million to bankroll local and regional expansion.

Michael Liwanag, vice president for Corporate Planning and Investor Relations chief of URC, as quoted in the report said that, “We’re accelerating our capital expenditures. It’s been $120 million in the last three years and this year, it will be $150 million because we are starting in Myanmar. In the next six months, we are entering Myanmar.”

“Other than organic growth, we have evaluated several merger and acquisition opportunities outside the Philippines, but we are at a deadlock at this point in time,” he added.

Liwanag further said that URC wants to become a major player in Southeast Asia with strong brands, as it looks at a potential $1-billion acquisition while tapping Myanmar as its newest market.

Robinsons Retail IPO

The local bourse has also given the green light for the retail group of John Gokongwei to proceed with its more than P40-billion IPO this month. The initial offering was earlier postponed.

In its regular meeting, the PSE board approved the application RRHI, subject to certain conditions, covering the initial listing of up to 1.4 billion common shares with a par value of P1 a share, under the Main Board of exchange.

A memorandum posted at the PSE website showed on Friday that Robinsons Retail, which will be the seventh company to go public this year, is set to raise as much as P40.2 billion from the sale of up to 461.90 million primary offer shares at a maximum price of P86.64 apiece.

With the overallotment option of 22.85 million shares, the gross proceeds of the public offer will be as high as P42 billion.

The final price of the IPO will be set on October 25, while the share sale period will be from October 29 to November 5. The shares will be officially listed at the PSE on November 11. About 70 percent of the primary offer shares will be sold overseas.

The company will use the proceeds from the offer to fund its expansion plans.

“It [Robinsons Retail] intends to use majority of the net proceeds from the primary offer to partially fund capital expenditures in connection with the establishment of new stores, and the remaining proceeds will be used to fund renovation of existing stores and repayment of all outstanding bank loans,” the group said in its IPO application to the Securities and Exchange Commission.

RRHI has tapped Deutsche Bank AG Hong Kong Branch; J.P. Morgan Securities plc and UBS AG, Hong Kong Branch as joint global coordinator, bookrunner and international lead manager, respectively, for the offer.

In late June, the group of Gokongwei decided to postpone the IPO of its retail unit, specifying that the group still has to wait for market conditions to pick up before pushing through with it. The company was supposed to do its IPO during the second quarter of this year.


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