Citicore Energy REIT Corporation (CREIT) has firmed up its initial public offering (IPO) price at P2.55 per share after it received its permit to sell (PTS) from the Securities and Exchange Commission (SEC) on Wednesday, Feb. 2, for its float of 2,181,819,000 common shares, with an over-allotment option of up to 327,273,000 common shares.
Through its sponsor-firm Citicore Renewable Energy Corporation, the company has also decided to hike its stake from 57.4 percent to 66 percent, in the intent of ‘rightsizing the offer’ – net of the over-allotment option.
“The move reflects the sponsor’s vote of confidence in the company’s long-term sustainable growth and pursuit of a net zero carbon future for all,” CREIT noted in its statement to the media.
After the listing, the resulting public float of the company will be 38.3-percent, assuming that the over-allotment option had been fully exercised. Essentially, that will already be above the 33.33-percent public ownership requirement as prescribed under the revised implementing rules and regulations (IRR) of the real estate investment trust (REIT) law.
On the pricing for the IPO, CREIT emphasized that the stock offering had been “priced more reasonably to reach a wider investor base to serve as the company’s long-term partners.” The offer period will be from February 2 to 8; while listing at the Philippine Stock Exchange (PSE) main board will be on February 17.
The firm expounded that “at an IPO price of P2.55 per share, CREIT’s implied dividend yields based on projected 2022 and 2023 earnings are 7.0 percent and 7.4 percent, respectively,” as stipulated in the final REIT plan.
Oliver Tan, president and CEO of CREIT, said “the company believes that a more affordable pricing will allow a broader set of investors to participate in CREIT’s value proposition.”
He qualified “what we want to offer in CREIT is a sustainable investment in various aspects – economical - for the investor; social - for the communities; and environmental - towards a zero-carbon future.”
The dividend payout policy to be implemented would be anchored on at least 95% of the firm’s distributable income for the preceding year -- subject to availability of unrestricted retained earnings and with compliance to applicable laws.
Relatively, that entails a premium over the required dividend payout of at least 90 percent based on the REIT’s implementing rules and regulations.
The underwriting syndicate for CREIT’s listing is led by Unicapital, Inc., BDO Capital and Investment Corp., PNB Capital and Investment Corp., Investment & Capital Corporation of the Philippines (ICCP), as well as CLSA Limited and CIMB Investment Bank Bhd as international bookrunners.