Food additive maker, thrift bank next to go public

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MANILA - A food additive maker and a thrift bank will sell their shares to the public for the first time, capitalizing on favorable market conditions.

D&L Industries Inc. and Philippine Business Bank have filed their respective registration statements with the Securities and Exchange Commission.

D&L plans to raise P6.3 billion, while PBB wants to generate P4.25 billion.

Shares of D&L and PBB will be listed on the first board of the Philippine Stock Exchange.

In a statement, D&L said it will sell 1.07 billion primary shares, representing up to 30 percent of its outstanding capital, in an international and domestic offering that will close within the fourth quarter of the year.

Proceeds from the offering will bankroll investments and acquisitions, payment of financial obligations and general corporate purposes.

D&L owns 34 percent of listed Chemrez Technologies. Both firms have the Lao family as their principals.

Through its subsidiaries Oleo-Fats, First in Colours, D&L Polymers & Colours, and Aero-Pack Industries, D&L also produces hundreds of variants of its products and focuses on designing specialty product solutions for customers mostly in the food and plastic products businesses.

D&L’s consolidated revenues increased from P9.2 billion in 2009 to P12.8 billion in 2011, representing a compounded annual growth rate of 18 percent. Its consolidated net income increased from P226 million in 2009 to P997 million in 2011, representing a CAGR of 110 percent.

For its part, PBB will offer up to 101.33 million common shares, representing approximately 29.5 percent of its issued and outstanding capital stock after the share sale, with a par value of P10 at a maximum price of P41.94 apiece.

Net proceeds of up to P4.01 billion will finance the payment of branch licenses, expansion of branch network, implementation of IT projects and for general banking purposes.

From a single branch in 1997, PBB has grown its network to 71, mostly in Metro Manila. It has 14 unfulfilled branch licenses, nine of which are in Metro Manila and five in the provinces.

PBB offers a range of commercial and consumer or retail banking products, trust services, and other related financial services such as mail and telegraphic transfers, safety deposit facilities, payment services, among others.

PBB is principally owned by the family of Ambassador Alfredo Yao, who owns approximately 90 percent of the issued and outstanding shares prior to the offer. The Yao family also owns ZestAir and Zest-O.

The bank's net profit grew to P746.97 million in 2011 from P683.28 million in the previous year. At end-June, it more than doubled its net income to P496.64 million from P204.20 million in the same period in 2011 on higher trading gains.

Maybank ATR Kim Eng Capital Partners will lead underwrite the two initial public offerings.

Freya Natividad, investment analyst at 2TradeAsia.com, said now is a good time to sell shares to raise funds for expansion.

“We still expect that the Philippines will be one of the best-performing equities market in the region, one of the strongest in Asia. I think more companies will pursue listings especially in the fourth quarter and in the first quarter,” said Natividad.

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