By James A. Loyola
The Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE) have approved the planned P385-million initial public offering (IPO) of Kepwealth Property Philippines, Inc.
To be the firms IPO this year, property leasing and asset management firm Kepwealth is aiming to list its shares at the PSE’s Small, Medium, and Emerging Board.
“It may have taken some time before we had our first IPO but I am pleased that KPPI is embarking on its maiden share sale. I hope that this move will encourage other companies that pushed back their IPOs to revisit their plans and consider the stock market as an avenue for capital raising,” said PSE President and CEO Ramon S. Monzon.
He added that “I am also pleased that we have a new listing on the SME Board. I hope this will prompt companies who qualify to list on this Board to explore the possibility of raising funds through an IPO.”
The SEC approved the registration of Kepwealth’s 201.06 million common shares of which 67.03 million common shares, or 33.34 percent, will be sold via a primary offering at a maximum price of P5.74 per share.
The company plans to use the net proceeds of P363.03 million to diversify its asset base and expand its office leasing portfolio with the acquisition of about 3,500 square meters of leasable space.
Kepwealth Pwill spend P245 million of the net proceeds to acquire office spaces primarily in Pasig City and Makati City, and P120 million in Davao City within the first to second quarter of 2020.
In the meantime, the company will invest the net proceeds in short-term liquid investments such as short-term government securities, bank deposits and money market placements, which are expected to earn prevailing market rates. If such investments incur losses, any shortfall will be financed by internally generated funds.