CEBU, Philippines - Eagle Cement Corp., owned by business tycoon Ramon Ang, debuted on the Philippine Stock Exchange yesterday, with proceeds from its maiden share sale set to be used to partially finance the construction of its Cebu cement plant.
The cement maker said the construction of the Cebu facility is expected to start by the fourth quarter of 2017 and targeted to be operational by the first quarter of 2020, with the firm looking to benefit from the government's massive infrastructure push.
The Cebu plant will have a capacity of 2 million metric tons (MT).
ECC raised P7.5 billion in its initial public offering (IPO), with net proceeds of P6.9 billion after deductions and expenses.
Eagle Cement shares were up 5.87 percent in early trading yesterday to P15.88.
The PSE index was up 0.69 percent to 7,921.77 as of noon trading yesterday.
The company said the net proceeds "shall be used to partially finance construction of a 2 million MT capacity cement plant and its support facilities in Cebu.
The Cebu cement plant is estimated to be at about P12.5 billion, the listed firm said.
"The Cebu Cement Plant will include construction of a manufacturing plant in Cebu, and distribution centers and marine terminals in Southern Luzon, Visayas, and Mindanao such as, but not limited to, the following areas: Camarines Sur, Camarines Norte, Bacolod, Iloilo, Negros Occidental, Negros Oriental, Palawan, Sorsogon, Leyte, and Davao," it said.
The project cost includes procurement of various construction-related materials and services, as well as the purchase of the properties where the plant will be built on, which the company did not specify yet.
The cement maker intends and estimates to finance the completion of the Cebu plant through a combination of the net proceeds of the offer (55 percent of project cost), debt funding (up to 44 percent of cost), and internally generated funds (at least 1 percent of project cost).
The net proceeds from the IPO will be primarily used for civil works or importation of equipment.
The processing of the regulatory permits and licenses for the Cebu manufacturing plant will start after the firm's stock exchange listing upon receipt of the IPO proceeds.
The company will begin with site development and earthmoving works by the fourth quarter this year and completion is expected by the first quarter of 2020.
Eagle Cement may undertake the construction and operations of the Cebu plant either directly or through a wholly-owned subsidiary of the firm. (FREEMAN)