Villar-led PREIT cuts IPO price by 25%

MANILA, Philippines — Premiere Island Power REIT Corp. cut its offer price in the run-up to its initial public offering.

In a disclosure sent to the Philippine Stock Exchange on Thursday, the real estate investment trust (REIT) firm of the Villar family slashed its final offer price by 25% to P1.5 per share. The IPO will cover 1.4 billion secondary common shares.

PREIT’s IPO still has an over-allotment option of 210 million shares, which would be offered if investor demand is robust.

Proceeds could reach up to P2.4 billion if the overallotment option is exercised, lower compared to P3.2 billion that the company could raise using the original IPO price. The law mandates REIT companies hand out 90% of its annual net income as dividends to investors.

“(It’s) probably hard for them to build book at max price considering lots of investors lost a lot in the recent Villar IPOs,” Hernan Segovia, trader at Summit Securities, said when sought for comment.

PREIT is the power and infrastructure REIT vehicle of Villar-led Prime Asset Ventures, Inc. The company’s property portfolio is currently comprised of land and power assets used by power generation projects of SIPCOR and CAMPCOR in Cebu and Siquijor. These have a total combined capacity of 21.2 megawatts.

The REIT offering comes amid a slew of companies postponing their IPOs this year since many fear investor interest might prove lackluster amid rising inflation and a high interest rate environment

“Sort of like Villar IPO is synonymous to being an exit liquidity and wealth destruction kind of thing,” Summit Securities’ Segovia added.