Globe Asiatique eyes up to P3.05 billion from IPO

MANILA, Philippines - Globe Asiatique Realty Holdings Corp., a leading developer of low-cost housing communities, has formally filed with the Securities and Exchange Commission its application for an initial public offering (IPO) of shares, which is expected to generate between P880 million and P3.05 billion in proceeds.

Globe Asiatique has a solid track record in the development of low-cost to middle-income housing projects and has produced and delivered over 13,400 housing units in nine completed projects under its Xevera brand since it was formed in 1994.

The company is selling 136.36 million shares through a primary offering with an overallotment option of up to 168.7 million shares at a price ranging from P6.50 to P10 apiece.

The shares to be offered represent 15 percent of the issued and outstanding capital of the company.

It is also selling as much as 34.09 million shares through a secondary offering. BDO Capital & Investment Corp. has been tapped as issue manager and lead underwriter for the offering.

Proceeds from the IPO will be used to fund the construction of G.A. Sky Suites and Corporate Tower and several residential subdivisions, as well as pay down bank loans.

Globe Asiatique said it is in the process of developing another brand, Sameera, which will offer housing units at an even lower price range than its Xevera brand.

It has also lined up housing projects in Bacolod, Subic, Mindoro and Angeles City, Pampanga to take advantage of the shortage of 3.8 million housing units in the country, primarily in the socialized and low-cost category.

The company said it expects the demand for low-cost housing to be undersupplied for the next two years.

The company maintains a landbank of 215,188 square meters available for use for future development. It has been working with the Home Development Mutual Fund or Pag-IBIG to provide end-user financing options to clients.

Last year, Globe Asiatique posted a net income of P235.82 million, nearly six times the P39.6 million reported in 2007, on the back of higher sales from new and ongoing projects.

Revenues grew more than five-fold to P3.86 billion, mainly due to sales from the P3-billion Xevera Bacolod project whose 4,000 units were sold out in three and a half months after its launch in January 2008. In the nine months ending September this year, the company reported a 39.74 percent growth in net income to P300.14 million on robust sales and better margins.