OceanaGold IPO priced at P13.33

MANILA, Philippines — OceanaGold Philippines Inc., the first company to brave the stock market this year, slashed its initial public offering (IPO) price by 23 percent amid inflation and global uncertainties, finalizing the equity deal at P6 billion.

The Philippine Stock Exchange (PSE) on Wednesday said OceanaGold had set the offer price for 456 million secondary shares at P13.33 each, lower than the initial maximum price target of P17.28 per share. This also downsized the public offering from the initial amount of P7.9 billion.

This pricing values 100 percent of the company— the first mining firm to go public since 2012—at around P30 billion.

Based on OceanaGold’s April 15 preliminary prospectus, the offer period will run from April 29 to May 6. The shares will be listed on May 13 under the stock symbol “OGP.”

READ: OceanaGold Philippines secures SEC OK for P7.9-B IPO

The company said among the considerations in determining its offer price are its ability to generate earnings and cash flow, the level of demand from institutional investors, and overall market conditions.

COL Financial Group chief equity strategist April Lynn Tan told the Inquirer that current market conditions were “not very good,” resulting in cheap valuations for a lot of stocks.

“It’s difficult to get a high valuation for companies that plan to go public,” she added.

‘Interesting’ for investors

Astro del Castillo, managing director at First Grade Holdings, said OceanaGold’s lower IPO offer price “is not a surprise.”

“It’s hard to find gold in PSE today. Stock market conditions are challenging nowadays given the red flags, [such as] US interest rates, weakness of peso, inflation, and geopolitics,” he said in a Viber message.

Still, Del Castillo said OceanaGold remained “interesting” for investors.

“The company’s IPO price may seem to be worth like silver, but chances of it to be of gold value may not be far away,” he added.

READ: OceanaGold Philippines budgets $7M for Didipio, new mine site

OceanaGold is the local unit of Toronto-listed OceanaGold Corp. and the operator of the Didipio gold-copper mine in Nueva Vizcaya province.

Didipio mine site, an underground and open pit that has an estimated mine life of 10 years, is covered by a 25-year Financial and Technical Assistance Agreement (FTAA) that was renewed in July 2021. This offering is part of compliance with FTAA requirements.

For its part, the PSE expects to see up to P40 billion worth of equity deals from at least six IPOs within 2024.

Last year, delistings overtook IPOs as four companies exited the local bourse, contributing to a P300-billion market value exodus. Three firms with a combined market value of P13.1 billion went public in 2023.