Yuchengco-led EEI to launch P6-B preferred share sale

Yuchengco-led construction group EEI Corp. is returning to the local capital market next week with an offering of as much as P6 billion worth of preferred shares as it prepares for a bigger pipeline of projects in 2022.

The preferred shares will be in two series: series A, which carries an initial dividend rate of 5.7641 percent per annum for the first 3.5 years; and series B, which offers a dividend rate of 6.9394 percent per annum for the first 5.5 years.

EEI is selling to the public up to 60 million preferred shares at an offer price of P100 apiece. The base offer consists of 40 million shares, but EEI has the option to add 20 million shares in case of strong demand.

The offering will run from Dec. 9 to 15 this year, while listing on the Philippine Stock Exchange is targeted for Dec. 23.

While the preferred shares have perpetual tenor, EEI has the option to redeem them after 3.5 and 5.5 years, respectively, for series A and B. If not redeemed, the dividend rate will be adjusted higher.

Companies typically issue preferred shares when they want to build up capital without diluting common share holdings. Preferred shares carry a fixed dividend rate, whose payment is prioritized over dividends paid to common stockholders.

RCBC Capital Corp. is the sole issue manager for the offer and will also serve as joint lead underwriter and bookrunner alongside SB Capital Investment Corp.

EEI earlier unveiled plans to hire over 10,000 skilled workers as the company expects to run on “sustained high gear” in the next years while participating in bidding for big-ticket public and private sector projects.

Presently, EEI has 13,382 employees across different construction projects in the Philippines, while it has another 6,909 deployed overseas, while subsidiaries separately employ another 3,201.

EEI is currently valued by the stock market at around P6.6 billion.