Pipe maker’s plan to go public OKd
MANILA, Philippines–The Securities and Exchange Commission has approved a plan by Bulacan-based plastic compound and pipe manufacturer Crown Asia Chemicals Corp. to raise P222.78 million from a local stock market debut.
Based on a document from the SEC, Crown Asia was given authority to sell up to 158 million primary common shares for a maximum of P1.41 per share, raising fresh funds to expand and modernize its manufacturing and warehousing facilities.
The price ceiling represents about 1.18 times the company’s net tangible book value as of end-2014 amounting to P562.56 million or P1.19 per share.
Subject to the approval of the Philippine Stock Exchange, the offering is targeted to run from April 10 to 17.
Abacus Capital & Investment Corp. has been mandated as the issue manager and underwriter for the transaction. About 31.6 million or 20 percent of the offer shares will be allocated for trading participants.
Proceeds from the initial public offering are targeted to fund construction of polypropylene random copolymer type and high-density polyethylene manufacturing plant and warehouse as well as purchase equipment. Some will be used to retire debt and modernize existing compounds and pipes plants while the rest will be used for working capital.
Crown Asia is primarily engaged in the production of plastic compounds and other related products such as polyvinyl chloride (PVC) pellets. It also manufactures plastic pipes. The compounds and pipes are used directly and indirectly in the construction and telecommunications industries.
The company is owned by the Villanueva and Perez families which will collectively own 74.95 percent of Crown Asia after the offering.
Crown Asia started commercial operations in 1990 with the trading of imported polyethylene compounds and paraffin waxes. In the same year, it started the production and sales of PVC compounds at its plant in Guiguinto, Bulacan. Capitalizing on its expertise in PVC formulation, Crown expanded downstream into the manufacture of industrial plastic pipes under the Crownpipes brand for electrical, sanitary, potable water, and telecommunications applications.
As of Jan. 31, 2015, Crown Asia had 132 regular employees, 39 probationary employees, and 74 contractual employees. It has an operating capacity of 15,000 million tons per annum (MTPA) for its compounds business and 8,500 MTPA for its pipes business.
In 2014, Crown Asia generated a net income of P65.38 million out of revenues of P850.74 million.–Doris C. Dumlao
