Cosco Capital, the conglomerate led by grocery magnate Lucio Co, has firmed up plans to tap the local capital market through a follow-on equity offer or re-initial public offering estimated at $450 million.
Cosco and its key asset, Puregold Price Club, went on voluntary trading suspension at the Philippine Stock Exchange yesterday as Cosco announced plans to sell two billion common shares to qualified institutional investors.
A disclosure to the Philippine Stock Exchange said Cosco intended to enter into a transaction involving the placement of common shares of the corporation by the selling shareholders and the subsequent subscription of new shares of the corporation involving 4.99 billion new shares pursuant to a capital increase recently approved by the Securities and Exchange Commission. The new shares approved for listing will be issued to subscribers affiliated with the group of Co.
Following the issuance of the new shares relating to the injection of assets into Cosco, the total issued capital for the corporation will be 6.26 billion. The assets injected into Cosco included a 51-percent stake in flagship grocery chain Puregold, a portfolio of liquor distribution companies, commercial real estate companies and an oil storage business (Pure Petroleum Corp.).
In the same disclosure, Cosco announced a special block sale of up to two billion common shares to qualified institutional buyers through the local stock exchange. Cosco said it would make the proper disclosure upon the determination of the final price for the offer.
Fund managers estimated that Cosco would raise around $450 million from the equity deal.
Financial market intelligence provider IFR, a Thomson Reuters publication, earlier reported that Cosco might tap Deutsche Bank and JPMorgan to manage the offering.
The follow-on offering has been widely expected by the market ever since Co restructured what was once a purely oil, gas and mining play Alcorn Gold Resources Corp. (APM) to become the holding firm for the bulk of his businesses. Doris C. Dumlao