Synergy completes P 13.85-B ‘re-IPO’
Power grid holding firm Synergy Grid & Development Phils. Inc. completed a P13.85-billion re-initial public offering (re-IPO), whose “bargain” pricing attracted brisk demand from domestic investors.
The offering was oversubscribed by five times the allotment for domestic investors based on demand from trading participants and retail investors, said Eduardo Francisco, president of BDO Capital & Investment Corp., sole domestic coordinator for the offering and also a joint domestic lead underwriter and joint bookrunner.
Asked about demand from institutional investors, Francisco said that even before the setting of follow-on offering price, the institutional tranche had been oversubscribed by two times the offer, but demand “soared when price was set at P12 [per share] because it’s so cheap.”
Synergy, which is led by business tycoons Henry Sy Jr. and Robert Coyiuto Jr., sold 1.053 billion primary common shares and exercised the overallotment option that resulted in the issuance of additional 101 million shares.
This equity deal boosted Synergy’s public ownership to 22.13 percent, or more than the 10 percent minimum ratio of shares required to remain listed on the local bourse.
The shares will be listed on the Philippine Stock Exchange today (Nov. 10), which will also mark the resumption of its stock trading. Trading on Synergy had been suspended at the local bourse since May 31 this year when its public float dwindled to 0.25 percent.
After the re-IPO, foreign investors ended up holding about 7.61 percent of Synergy’s shares.
Local small investors were allowed to subscribe to as much as P1 million worth of shares, 10 times the typical limit.
The company will use the proceeds from the re-IPO to directly subscribe to nonvoting preferred shares that will be issued by National Grid Corp. of the Philippines (NGCP), the sole and exclusive operator of the Philippines’ transmission network. This makes Synergy the indirect controlling shareholder of NGCP.
At the offer price of P12 per share, Synergy was valued at about five times its potential cash flow for 2022.
