Phl firms raise P111.4 B from equity-linked deals

MANILA, Philippines - Philippine companies have raised a total of P111.4 billion from 20 equity and equity-linked transactions in 11 months this year, according to the Bank of the Philippine Islands (BPI).

“This is being driven in part by the growing Philippine economy and attractive valuations where the Philippines is the third best-performing equity index in Asia after India and China,” the BPI report said yesterday.

BPI Capital Corp.’s equity capital markets head Reggie Cariaso said the prevailing factors that dictated on the high utilization of the country’s capital markets will continue to prevail until next year.

He said events that occurred in 2014 were a combination of factors that have pushed and pulled companies to the equity capital markets.

“They are encouraged by regulatory and external factors while good market conditions and attractive valuations pull them. These factors will grow in significance as we approach 2015,” Cariaso added.

Others factors include regulatory and external factors such as stricter Bangko Sentral ng Pilipinas (BSP) regulations, Basel III risk framework, growth of Public-Private Partnership (PPP) projects and the Asean integration, all of which spurred companies to raise equity capital for funding.

Well-known names such as Ayala Corp., Globe Telecom and Megawide Construction Corp. accessed the equity capital markets, while financial institutions like the Philippine National Bank (PNB) and BPI have conducted stock rights offerings this year.

In the first three quarters of 2014 alone, 12 equity and equity-linked transactions were completed, raising a total P76 billion.

Philippine equity capital markets activity in the fourth quarter picked up significantly, with eight deals completed and P35.4 billion raised so far – more than any of the previous quarters in 2014 in terms of number of deals and volume.

There are at least two more equity deals in the pipeline, which are expected to close before the end of the year.

Philippine-listed EMS company Integrated Micro-Electronics Inc. (IMI), one of the country’s most globally diversified companies, is seeking to raise P1.6 billion to P2.2 billion in a public equity offering.

Another deal is the P4 bilion- to P4.6-billion public offering of Max’s Group Inc.

BPI Capital was a bookrunner for the P3.16-billion Century Pacific Food IPO, the P10-billion Globe Telecom preferred share offering, Ayala Corp.’s P13.5-billion preferred share offering and $275-million top-up placement, P4-billion Megawide preferred share offering, P7.5-billion SSI Group IPO, and BPI’s P25-billion stock rights offer.

BPI Capital is also issue manager and bookrunner for the upcoming IMI and Max’s public offerings.