SEC OKs IPOs of Cagayan de Oro hospital, sugar mill

The Securities and Exchange Commission (SEC) has approved an initial public offering of as much as P1.44 billion planned by hospital operator Allied Care Experts Medical (ACE) Center-Cagayan de Oro Inc. and a separate stock offering worth up to P558.5 million to be launched by sugar milling and cogeneration firm Central Azucarera de San Antonio Inc. (Casa).

Both ACE-CDO and Casa will offer shares to the public, but these shares will not be listed on the local stock exchange. Instead, they will be traded over the counter.

In its meeting on August 31, the SEC en banc cleared the registration statements of ACE-CDO and Casa covering 240,000 and 1,850,000 common shares, respectively, subject to compliance with remaining requirements.

ACE-CDO, which is part of the ACE hospital chain, will offer 3,600 blocks composed of 10 shares each, with price ranging from P200,000 to P400,000 per block. The shares will be traded by the hospital’s internal staff.

Bulk of proceeds from the offering will be used for a hospital construction in Cagayan de Oro, estimated at P778.4 million. ACE-CDO is currently building an eight-story, 176-bed healthcare facility covering a floor area of 21,198 square meters in Barangay Lapasan, Cagayan de Oro City.

The rest of the proceeds will be for the acquisition of medical equipment, partial payment of a loan and for the hospital’s working capital requirement.

The intended market for the IPO will be medical practitioners, their relatives, as well as the public. Physicians and other medical specialists who will subscribe to at least one block or 10 shares from the offer will be allowed to practice in the company’s hospital, subject to restrictions, limitations and obligations as may be imposed.

For its part, CASA will offer 277,500 common shares, consisting of 214,551 new common shares by way of a primary offer and 62,949 secondary shares offered by a selling shareholder, prospectively priced at a maximum of P2,012.52 per share.

The offering is pursuant to the Electric Power Industry Reform Act of 2001 (Republic Act No. 9136), which mandates generation companies that are not publicly listed to offer and sell to the public no less than 15 percent of their common shares within five years from the effectivity of Energy Regulatory Commission Resolution No. 4-2019.

The Chan-owned company primarily operates a sugar milling business, but also engages in power generation through a biomass cogeneration plant with an initial installed generation capacity of 15 megawatts.

Net proceeds from the primary offer will be used to upgrade Casa’s cogeneration facility, motor pool and sugar factory. The rest will be spent for land acquisitions and farm mechanization.