SAN ILDEFONSO, Bulacan- Eagle Cement Corp., the country’s fourth largest cement maker owned by businessman Ramon Ang, expects to raise P9.2 billion from what could be the largest domestic initial public offering in May.
“We are bullish that the domestic investors can absorb our IPO,” Eagle Cement said. The transaction is seen to be the biggest purely domestic IPO in the stock exchange.
Eagle Cement plans to sell up to 575 million common shares at an offer price of up to P16 apiece in May.
This would exceed Wilcon Depot Inc.’s P7-billion purely domestic IPO.
Past IPOs worth at least P5 billion needed to allocate a big chunk of their offerings to foreign investors due to weak domestic liquidity.
Given the increased domestic liquidity, many companies are now considering an all domestic offering.
Eage Cement said while it was confident about the local stock market, the recent drop in stock prices of other cement companies such as Cemex Holdings Philippines Inc. and Holcim Philippines Inc. could affect the planned share sale.
Share price of Cemex dropped to P6.70 Tuesday from P11.06 at the start of the year after it reported weak fourth-quarter earnings. Stock price of Holcim Philippines was also on the downtrend, as it declined to P14.80 Tuesday after hitting a 52-week high of P17.30 on Feb. 13.
Eagle Cement said it expected to sustain the growth momentum this year. Eagle Cement reported a net income of P4.11 billion in 2016, up by 11.7 percent from P3.68 billion in 2015.
Net sales increased 20 percent to P13.27 billion in 2016, on the back of a 5.12-percent increase in sales price and 14.15-percent rise in sales volume with the completion of a second production line.
The cement firm currently operates two production lines in Bulacan province, with a combined production capacity of 5.1 million metric tons or 130 million bags of cement per annum.
Eage Cement said it would start operating a third production line by 2018 that would add 2 million metric tons or 50 million bags of cement to the current capacity.