ICTSI returns to equity market, raises P4.7B

Tycoon Enrique Razon Jr.-led international port operator International Container Terminal Services Inc. (ICTSI) has returned to the equity market for the first time in seven years by selling P4.7 billion worth of common shares lodged in its treasury.

ICTSI sold 40 million treasury shares at a price of P117 a share, representing a 3.9-percent discount to the closing price on Nov. 25 when the deal was executed.

“This opportunistic reissuance of our treasury shares culminates the execution of the capital management strategy that we conveyed to investors in early April. With $800 million raised in senior debt, hybrid equity and common shares from both existing and new stakeholders, ICTSI enters 2021 focused on a five-year horizon through the same lens of achieving growth organically and through value-accretive acquisitions,” ICTSI senior vice president and chief financial officer Rafael Consing Jr. said in a press statement on Monday.

The offering, valued at around $97 million, was “well-received and oversubscribed by high quality foreign and local institutional investors,” ICTSI reported.

ICTSI also noted that this marked its first equity follow-on offering since 2013.

Proceeds from the equity deal will be used to fund general corporate purposes, including committed capital expenditures and acquisitions.

ICTSI took advantage of the upswing in the stock market in recent weeks, mostly driven by the gradual reopening of the domestic economy after months of lockdown and the string of favorable news from major global pharmaceutical firms about coronavirus vaccine development.

Companies with sufficient earnings tend to buy back their own shares when they feel that their stocks are undervalued by the market. Conversely, they tend to place out shares accumulated in their treasury to raise fresh capital when they believe they can get reasonable pricing for these shares. Any reissuance of treasury shares, however, dilutes dividend payout to shareholders as this increases the number of outstanding stocks entitled to the distribution of dividends. INQ