Hybrid rice producer seeks to raise up to P8B via IPO

The country’s leading hybrid rice producer SL Agritech Corp. hopes to proceed with a long-planned stock market debut in 2017, aiming to raise as much as P8 billion to expand its farming, milling, seed processing and exporting capabilities.

“We will wait for our fiscal year to end on May 31, 2017. We will do IPO (initial public offering) if we can have a market cap of P20 billion,” SL Agritech Henry Lim Bon Liong said in reply to an Inquirer inquiry.

“We will raise P6 billion to P8 billion if possible,” he said, estimating that an IPO would bring 25 percent of the company’s shares to public hands.

SL Agritech has yet to tap an underwriter but Lim said several investment bankers were communicating with the company in relation to the planned equity deal.

Early this year, SL Agritech raised P1 billion from its inaugural offering of short-term commercial paper.  For the company, this was a test of public confidence more than a fund-raising.  In three days, the offering was oversubscribed.  Using proceeds from this initial foray, SL Agritech was able to boost contract growing areas and expanded production of its Dona Maria rice for both the domestic and export markets.

“We had a remarkable growth in the hybrid rice business , especially (beneficial) for poor farmers,” Lim said, noting the increase in business from central Luzon that in turn helped double the company’s income.

Most recently, SL Agritech issued P1.5 billion worth of commercial papers, which the company listed on fixed-income platform Philippine Dealing & Exchange Corp. last week. —DORIS DUMLAO-ABADILLA