George Ty holding firm to go public in April

MANILA, Philippines—Taipan George Ty has set in April the stock market debut of his flagship holding firm GT Capital Holdings Inc., which is expected to generate as much as P24.6 billion.

In an updated prospectus dated February 27 filed at the Securities and Exchange Commission, GT Holdings said it plans to list on the Philippine Stock Exchange on April 23.  The share sale will be priced on April 3 while the offering will run from April 10 to 17.

The stock offering, which seeks to take advantage of the strong interest in conglomerates as a proxy to the buoyant domestic economy, will consist of up to 41.217 million shares of stock and an over-allotment option of 6.18 million shares.

The shares will be offered for a maximum price of P520 per share, suggesting a P21.43 billion equity deal, which can increase to P24.6 billion if the overallotment option were exercised. This equity exercise can bring to public hands as much as 30 percent of its outstanding stock.

Of the total offer, up to 33 million will consist of primary common shares, suggesting that as much as P17.16 billion in new money can flow into the holding firm, which has interests in banking (Metropolitan Bank and Trust Co.), real estate (Federal Land Inc.), automotive (Toyota Motor Philippines), insurance (Phil AXA Life Insurance Corp.) and power generation (Global Business Power). The remainder shall be secondary shares affiliated with the principal shareholder.

UBS is the sole global coordinator, international bookrunner and lead manager while its domestic counterpart is First Metro Investment Corp.

On the dividend policy, the prospectus stated that it shall be its policy to declare dividends whenever there are unrestricted earnings available. “Such declaration will take into consideration factors such as restrictions that may be imposed by current and prospective financial covenants; projected levels of operating results, working capital needs and long-term capital expenditures and regulatory requirements on dividend payments, among others,” it said.

GT Holdings paid cash dividends to its shareholders in 2009, 2010 and 2011 in the amounts of P1 billion, P500 million and P500 million, respectively.

The conglomerate expects P15.9 billion in net proceeds from the primary component of the offering after deducting fees and expenses. The net proceeds will be used to expand various operating units. For instance, up to P6.16 billion will be used for the capital spending of Federal Land in 2012 through 2013, particularly to bankroll ongoing projects like Grand Hyatt, Marco Polo Residences and Metropolitan Park.

The updated IPO disbursement plans are as follows: P1 billion to exercise an option to acquire a 4.6 percent stake in Global Business Power; up to P3 billion for the expansion of Toledo Capital Corp.; up to P4 billion to repay existing debt of GT Holdings; and up to P1.75 billion for new business development, including possible participation in infrastructure projects, business process outsourcing, renewable energy and general corporate purposes.