IPO of Phoenix Semicon gets regulator’s approval

The Philippine Stock Exchange has approved a plan by Phoenix Semiconductor Philippines Corp. (PSPC), a Korean-owned semiconductor outsourced manufacturer based in Clark Freeport in Pampanga, to sell P2.66 billion worth of shares from a stock market debut.

Based on its offering circular, PSPC plans to offer to the public 706.816 million shares at maximum price of P3.76 per share, bringing 25 percent of the company to public hands.

Of the offer shares, 286 million common shares will be in the form of primary shares while about the same amount will consist of secondary shares to be placed out by existing shareholders.

There will be an oversubscription option of 134.63 million shares on top of the 572.186 million primary and secondary shares that will be sold. Of the shares earmarked for oversubscription, 67.315 million will consist of primary shares and the rest will be secondary shares.

In a circular, the PSE said it had approved the IPO but added that PSPC and its underwriter had yet to finalize the dates of the IPO activities. A total of 2.356 billion shares will be listed on the PSE’s main board.

Proceeds from the primary offering are expected to be used for the expansion of PSPC’s machinery and production equipment and improvements in its facility this year and next year.

By 2015, the company plans to put up a new manufacturing facility to expand its production capacity beside its existing plant in Clark.

Incorporated in 2010, PSPC is chaired by Lee Byeongchun, who is also its president and chief executive officer. The company’s ultimate shareholder is the Bokwang Group of Korea which controls South Korean-listed STS Semiconductor & Telecommunications Co. Ltd. (STS) which, in turn, owns 99.99 percent of PSPC. STS is the entity that will sell the secondary shares.

STS was spun off from Samsung after the Samsung Electronics Co. Ltd. decided to split its semiconductor business division in 1998. It has another affiliate based in Suzhou, China. In 2009, STS and Samsung decided to put up an outsourced manufacturing plant focused on memory products. PSPC was established by STS as its Philippine subsidiary to act as the outsourced manufacturer of contract products for Samsung’s internal use as well as for Samsung’s customers like Apple, HP, IBM, Oracle, Lenovo and Dell.

Net tangible book value of PSPC prior to the offer is P3.27 billion or P1.64 per share.

As of end-February, it had total assets of $186.85 million.