Synergy Grid & Development Philippines, Inc. has set the final price for its follow-on offering at P12.00 per share—at the bottom of its adjusted price range of P12 to P17 per share.
This lower FOO price translates to a maximum IPO size of P13.81 billion. Earlier this week, SGDP lowered its follow-on offering size by 32 percent to a maximum of P19.57 billion from the earlier ceiling of P28.86 billion.
Based on the firm’s previous disclosure to the Philippine Stock Exchange, the firm reduced its FOO price range to P12 to P17 per share from the original range of P15 to P25 apiece.
SGDP is offering up to 1.05 billion common shares with an overallotment option of up to 101 million common shares. The IPO shares will be new unissued shares while the shares for the overallotment option will come from selling shareholders Henry Sy, Jr. and Robert Coyiuto Jr.
The firm is undertaking its public offering to fund its investment in the National Grid Corporation of the Philippines.
Synergy Grid is a holding company and its sole operating asset is the National Grid Corporation of the Philippines. It exercises control over 60 percent of the outstanding capital stock of NGCP through its subsidiaries, OneTaipan Holdings, Inc. and Pacifica21 Holdings, Inc.
Sy’s OneTaipan indirectly holds an equity interest of 30 percent plus one share in NGCP through its wholly-owned company, Monte Oro Grid Resources Corporation and Coyiuto’s Pacifica21 indirectly holds an equity interest of 30 percent minus one share in NGCP through its wholly-owned company, Calaca High Power Corporation.
NGCP is the sole and exclusive operator of the Philippines’ nationwide transmission network linking power generators and distribution utilities to deliver electricity to end-users across Luzon, Visayas and Mindanao.
It is a privately-owned corporation responsible for operating, maintaining and developing the power transmission grid, an interconnected system of towers, substations, lines and other high voltage equipment, that transmits gigawatts of power from where it is produced to where it is consumed.
Net proceeds from the offer will be used by Synergy to subscribe to non-voting preferred shares to be issued by NGCP, subject to applicable laws and regulations.
Proceeds of the preferred shares issuance shall be utilized by NGCP to finance its capital expenditure requirements and related cost and expenses, subject to compliance with the requirements of NGCP’s Concession Agreement with PSALM and TRANSCO and applicable laws, including the Franchise of NGCP.
NGCP projects approximately P160 billion of capex requirements for the 5th Regulatory Period covering 2021 to 2025 to support the load growth and meet the large generation capacity additions while maintaining system reliability and power quality.
Of the total amount, NGCP’s total capital expenditures budget in 2022 approved by ERC amounts to P37.6 billion.
About 68 percent or P25.59 billion is attributable to CAPEX relating to Planning and Engineering, which relate to projects for load growth, system reliability, generation entry, power quality and other support activities.