IPO plans of cement firm, property developer OKd

The Securities and Exchange Commission has approved the initial public offering applications of cement-maker Eagle Cement Corp. and property developer Cebu Landmasters Inc. worth a combined P13 billion.

Eagle Cement Corp., the country’s fourth largest cement manufacturer, is raising up to P9.2 billion to fund organic expansion and prepare for opportunities to grow through acquisitions and diversification into new business lines.

Based on a document from the SEC, Eagle Cement was given authority to sell up to 575 million shares at P16 each per share. The offer will consist of 500 million primary shares and up to 75 million worth of secondary shares for overallotment, in case of excess demand.

This exercise will bring to public hands about 11.5 percent of Eagle Cement’s shares.

In the meantime, Cebu Landmasters was given authority to sell 580 million shares at up to P6.56 per share. It will offer 430 million in primary shares plus 75 million secondary shares and another 75 million shares for overallotment.

Cebu Landmasters, the first Cebu-based property developer to debut on the local exchange, plans to use proceeds from the IPO to expand in key cities in Visayas and Mindanao.

Cited as the leading local real estate developer in the Metro Cebu residential condominium arena, Cebu Landmasters has an 11 percent market share of the total supply of residential condominium units in Metro Cebu, second only to Ayala Land, based on a market estimate made by CBRE Philippines (now Santos Knight Frank).

For its part, Eagle Cement operates the country’s largest cement factory in a 200-hectare complex in Barangay Akle, San Ildefonso, Bulacan. The cement complex is able to house and handle all stages of cement production from limestone quarrying, clinker production, additives mixing and market distribution. It is currently composed of two production lines that produce 5.1 million metric tons (MT) of cement every year or around 130 million bags per year.

The company is building a third production line in Bulacan which will add two million MT or 50 million bags of cement to its capacity. Capital outlay for this Bulacan expansion is estimated at P7 billion. The Bulacan complex also includes a quarrying site with 300 million MT of reserves which in turn would be good to feed all three fully operating production lines in this site for the next 50 years.

Net proceeds from its IPO will be used to partially finance construction of a cement plant in Cebu, which will have a two million (MT) annual capacity. Project cost is estimated at P12.5 billion.

The cement-maker has mandated China Bank Capital Corp., PNB Capital Corp. and SB Capital Corp. as joint issue managers, lead managers and bookrunners for its stock market debut.

For Cebu Landmasters’ IPO, BDO Capital acts as the sole issue manager while joint lead underwriters and joint bookrunners are BDO Capital and BPI Capital.