UPDATE: Philippines First Gen Narrows IPO Price Range
Tuesday, January 17, 2006
Updated to include analysts' comments, additional details of IPO, company profile.)
MANILA (Dow Jones)--Philippine independent power producer First Gen Corp. on Monday set a narrower price range of PHP51 to PHP62 for each share it will be selling in its initial public offer.
Analysts said the move is an early indication of the likely demand for the shares.
First Gen had flagged late last year a price range of PHP51 to PHP74 for the IPO intended to raise PHP11.2 billion from the sale of new shares.
Depending on the final price, which should be set on Jan. 27, First Gen will offer between 180.9 million and 219.9 million new shares. As many as 54.1 million shares have been set aside for oversubscription.
Existing shareholders, including investment holding company First Philippine Holdings Corp. (FPH.PH), which owns 88.4%, are ready to sell as many as 125 million shares in addition to the IPO shares.
If all shares set aside for the offer are taken up, including those for oversubscription, around 39.69% of First Gen will be held by new investors after the IPO.
Analysts, who attended the launch in Manila of the two-week international public offering, said the narrower price range was a likely indication of initial demand for First Gen.
"They probably realized its quite pricey" at PHP74, said an analyst with a local brokerage house, who attended the meeting.
Another analyst noted future growth will be limited by the company's ability to quickly build any new power plant, or its success in purchasing of power plants being privatized by state utility National Power Corp. (NAP.YY), or Napocor.
First owns four power plants with a total generation capacity of 1,726.6 megawatts, equivalent to around 11% of the country's total installed capacity. It isn't building any new power plants at the moment, and its latest acquisition was a 1.6-megawatt mini-hydroelectric plant sold by Napocor in 2004. First Gen president and chief operating officer, Federico Lopez, said the company's earnings were likely flat last year as it will likely be this year.
In the nine months to September, First Gen reported net profit of PHP3.65 billion on revenue of PHP33.73 billion. Net profit in the year-earlier period was slightly higher at PHP3.70 billion even though revenue was lower at PHP28.32 billion. For the whole of 2004, net profit was PHP4.96 billion, down from PHP5.33 billion in 2003.
The revenue increase was the result of higher fuel prices that translates to a higher price for the electricity it sells. Net profit, however, was squeezed by increased maintenance and operating costs.
First Gen's IPO, the country's first in 2006, will start on Jan. 31. The shares are scheduled to debut on the Philippine Stock Exchange on Feb. 10.
The company plans to use part of the IPO proceeds to fund future expansion projects, including a plan to bid for power plants Napocor is privatizing.
The international underwriters of First Gen's IPO are CLSA Ltd. and UBS AG, while the domestic portion of the offering will be handled by ATR-Kim Eng Capital Partners Inc. and BDO Capital & Investments Corp.
http://www.themesotheliomacancer.info
posted by philpower @ 8:16 AM,
