Profriends Group gets SEC approval for IPO in January, eyes P7.7 billion
MANILA, Philippines–Mass housing developer Profriends Group Inc. has secured approval from the Securities and Exchange Commission to raise as much as P7.7 billion from an initial public offering targeted by January.
Based on SEC documents, Profields was given the authority to register and offer to the public 385.75 million new shares at a maximum price of P20 per share. This offering will bring to public hands about 10.91 percent of the company’s outstanding shares.
Proceeds from this offering are meant to fund residential development projects, acquisition of land as well as an investment in Williamton Holdings Inc., a wholly owned subsidiary which will handle the in-house financing requirements of the group’s home buyers.
The company plans to infuse P2.48 billion to Williamton to expand its receivables portfolio while P3.1 billion of the proceeds will be used to fund ongoing projects in Cavite (Lancaster New City), Iloilo (Iloilo Estates) and Cagayan de Oro, based on the documents.
Meanwhile, Profriends has earmarked P1.24 billion for its land acquisition in Cavite, Iloilo and Cagayan de Oro.
Mandated as joint issue managers, lead underwriters and bookrunners were BDO Capital & Investment Corp. and First Metro Investment Corp.
In 2013, Profriends registered P8.27 billion in revenues while net income stood at P3.45 billion. Total assets were valued at P26.67 billion while equity stood at P9.6 billion.
For the first six months of 2014, revenues amounted to P5.36 billion out of which it earned P1.9 billion in net income.
The company has approved a dividend policy of maintaining an annual cash and/or share dividend payout of 20 percent of the previous year’s recurring net income.
Top officials of Profriends see strong demand for socialized, economic and low-cost housing segment benefiting business in the coming years. The company is likewise building up its portfolio of commercial and office space for rent, a strategy seen to grow recurring earnings in the future.
Located within Lancaster is Suntech iPark, a pioneering information technology park in Cavite, which is targeting to host 17,000 business process outsourcing (BPO) seats.
Profriends, which sells residential units priced at between P800,000 and P3 million per unit, sees sustained demand from first-time home-buyers such as young upwardly mobile professionals, people currently renting space in inner city, provincial-based buyers and overseas Filipino workers.
Since its inception in 1999, Profriends has sold over 36,000 houses in Cavite and Iloilo, posting an average net income margin and net income growth of 31 percent and 27 percent, respectively for the past three years.
Among the strengths that Profriends is pitching to investors is its large landbank in strategic locations (1,800 hectares), close enough to urban areas but not inside the cities, allowing the company to price its products at 1/4 to 1/5 of the price of urban products.
The company also said it has been offering high quality homes at affordable prices and flexible financing schemes and has developed a deep understanding of the market given its 28-year track record and an efficient production process.
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