Cemex Holdings Philippines Inc., the cement manufacturing company conducting an initial public offering, will likely exercise an overallotment option due to strong demand from both foreign and domestic investors, one of the underwriters handling the transaction said over the weekend.
BDO Capital and Investments Corp. president Eduardo Francisco said the international and domestic tranches of the offering were both oversubscribed at the end of the offering period on Friday.
“We are the stabilizing agent so the greenshoe option [or the over allotment option] has to be exercised,” Francisco said.
A strong demand was also noted among local small investors after BDO Capital opened branches in three malls to accommodate them.
Cemex Holdings is offering 2.0322.2 billion common shares at P10.75 per share for a total of P21.84 billion. The company has also allocated 304.947 million shares to cover overallment, which will boost total proceeds to P25 billion.
Citigroup Global Markets Ltd., The Hongkong and Shanghai Banking Corporation Ltd., Singapore Branch and J.P. Morgan Securities plc are acting as joint global coordinators and joint bookrunners, while BDO Capital serves as the domestic lead underwriter for the transaction.
Cemex Holdings chairman and president Pedro Jose Palomino earlier said he was pleased over the strong participation that the IPO received from institutional investors.
“We take this as a sign of the investors’ confidence in the long-term prospects of CHP and, more importantly, the Philippines as a whole,” Palomino said.
Francisco said the Cemex Holdings IPO was fairly priced and competitively compared with its regional peers.
“Cemex Holdings will be a good proxy for the Philippine infrastructure sector for the next couple of years,” Francisco said.
Cemex Holdings will be the second cement manufacturing company to be listed with the Philippine Stock Exchange.
Holcim Philippines is listed with the PSE while Republic Cement & Building Materials Inc., formerly Lafarge Republic Inc., was recently delisted from the exchange’s roster.
Cemex Holdings will also be the second company to conduct an IPO this year. The first was memorial parks developer Golden Haven Memorial Park Inc. of the Villar Group.