Eagle Cement Corp., a local cement manufacturer controlled by businessman Ramon Ang, priced its initial public offering at P15 per share, following the recent approval of its public listing by the Philippine Stock Exchange.
Eagle Cement will raise as much as P8.62 billion in proceeds based on the offer price. Ang said in an interview the final offer price was based on a price-to-earnings ratio of 16 times.
“At P15 per share, the company is only valued based on production capacity of four million metric tons. But by January 2018, our capacity will be at seven million metric tons,” Ang said.
Eagle, which will be traded under the ticker symbol “EAGLE,” said it was planning to sell 500 million common shares by way of primary offer with an over-allotment option of up to 75 million secondary shares. The offer period is set on May 16 to May 22 while target listing date is May 29.
Eagle is a wholly-Filipino owned cement company controlled by businessman Ramon Ang and is set to become one of the Philippines’ largest cement manufacturers in terms of capacity by next year.
Noel Dayrit, president of SB Capital Investment Corp., one of the lead underwriters, noted the positive bookbuilding results. “The issue was well received by institutional investors. This is a strong indication of their confidence in Eagles’s fundamentals and potential to be the major driver in the cement industry,” Dayrit said.
Proceeds from Eagle Cement’s IPO will be used to partially finance the construction of the company’s 2-million-metric-ton cement plant in Cebu, which will be its fourth production line.
The proceeds will also be used to build strategic marine terminals in the Visayas and Mindanao region to facilitate quicker distribution of its products in a bid to capture the Visayas and Mindanao cement market.
Eagle’s production capacity currently stands at 5.1 million tons a year. Once its third production line in Bulacan is complete in 2018, the company’s capacity will reached 7.1 million tons per annum, making it the country’s leading cement company in terms of capacity.
The completion of the Cebu plant in 2020 will further increase Eagle’s capacity to 9.1 million tons of cement per year.
Eagle appointed China Bank Capital Corp., Philippine National Bank Capital and Investment Corp. and SB Capital Investment Corp. as joint issue managers, joint lead underwriters and joint bookrunners for the IPO.