DoubleDragon P7.5-B follow-on offering approved

Property developer DoubleDragon Properties Corp. has obtained the approval of its shareholders for its plan to raise up to P7.5 billion in fresh capital through a re-initial public offering (IPO). This is in line with the company’s goal to be included in the Philippine Stock Exchange index roster in two years.

Unlike the P1.16-billion IPO conducted in April 2014—which was entirely taken up by domestic retail investors because the company was much smaller then—the follow-on offering aims not just to raise fresh capital but attract foreign institutional investors, DoubleDragon chair and chief executive officer Edgar Sia II said.

“For the last two years, we’ve been joining different conferences and met about 300 (foreign institutional) investors. That’s the group that we want to tap. This is a window for them so they can get good strategic position,” Sia told reporters after the company’s stockholders meeting yesterday.

DoubleDragon is now talking to foreign and local banks for the underwriting arrangement for the re-IPO, which the company hopes to pursue within this year. An underwriting arrangement is expected to be firmed up soon.

During the annual meeting, shareholders of DoubleDragon ratified a plan to issue up to 150 million common shares from the company’s authorized but unissued capital stock.

The follow-on stock offering is also in line with the upgrade of DoubleDragon’s 2020 net profit goal to P5.5 billion from P4.8 billion as it expects its leasable portfolio to become bigger than originally projected. DoubleDragon now expects its 2020 leasable portfolio to reach 1.2 million square meters compared to the old target of 1 million square meters.

Proceeds from previous fund-raising activities—including the first IPO, the offering of corporate notes and most recently, the P9.7 billion seven-year retail bonds issued last July—would be enough to cover the original goal of building a million square meters of leasable space and to meet the original profit goal.

However, DoubleDragon is mapping out its next stage of growth and this includes its aspiration to be part of the PSEi, the basket of the 30 most traded, most liquid and well-capitalized Philippine-listed companies.

Sia said the aspiration would be to be part of the PSEi in two years. While DoubleDragon’s market capitalization was not sufficient to qualify for the PSEi, Sia said it was its trading liquidity that would have to be enhanced to be able to join the roster of blue chips.

To date, DoubleDragon has a market capitalization of close to P100 billion and a public float of 25.62 percent.

During the stockholders meeting, Sia reported that the presence of CityMalls—DoubleDragon’s chain of community malls—was slowly being felt in various areas outside Metro Manila.