SEC approves Puregold’s P12.4-b public offering
by Jenniffer B. Austria
Based on the approved timetable, Puregold said it would set the final price of the shares on Sept. 21 and start offering them from Sept. 23 to 29. It plans to list the shares on Oct. 5.
The company will offer up to 600 million in primary and secondary shares and another 90 million common shares to cover overallotment.
The public offering could generate as much as P12.4 billion in proceeds based on an assumed maximum price of P18 per share.
Puregold said it was spending P6.26 billion from 2011 to 2013 primarily to put up new stores in Davao, Rizal, Cavite, Bataan, Pangasinan, Baguio City, Ilocos Norte, Caloocan, Bulacan, Camarines Sur, Laguna, Quezon City, Legaspi City, Iloilo City, Leyte, Cebu City, Tarlac City, La Union and Albay.
Puregold said it would use proceeds from the IPO to settle debt and finance store expansion.
Net sales reached P17.3 billion in the first six months of 2011, up 41 percent from P12.3 billion year-on-year while net income grew 270 percent to P782 million from P212.2 million.
Puregold will offer 500 million in primary shares and 100 million in secondary shares owned by existing shareholders, including Lucio Co and Susan Co.
The company plans to sell up to 420 million common shares to international investors and 180 million to local investors.
Puregold is the second-largest retailer among the hypermarkets, supermarkets and cash and carries in the Philippines based on gross sales in 2010.
The company has grown significantly since it commenced operations, expanding its business from one store in 1998 to 72 in 20 cities and 22 municipalities throughout Metro Manila as of end-July 2011.
The company focuses on two customer segments, which are retail customers and resellers. It offers three retail formats and store brands, namely hypermarkets, supermarkets and discounters.
Approximately 65 percent of its customers are C and D markets with a monthly income of P8,000 to P50,000.Source: http://www.manilastandardtoday.com
In my opinion we should do our due diligence before jumping into this IPO. The expansion of Puregold has greatly help its bottomline and also since part of the proceeds of the IPO is to be use to settle obligations the remaining payment will be use to put up more stores specially in the far flung provinces in Northern Luzon and probably Mindanao.
It is a new opportunity but again one should carefully study Puregold’s long term profitability. I am searching for available financial statement of the company to do fundamental analysis but so far haven’t found one. If you know where to find one please leave link in the comments below.