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STI cuts price of follow-on offering to P0.90 a share means BUSINESS

MANILA - (UPDATED 5:23 p.m.) Eusebio Tanco-led STI Education Systems Holdings Inc. will raise P2.7 billion from the sale of more shares, with the proceeds meant to expand the company's school network and to widen its public float.

STI told the local bourse on Tuesday that it cut the price of its share sale to P0.90 apiece, down from the earlier maximum offer price of P1.50.

STI will begin on Wednesday the sale of up to three billion shares to foreign and local investors, including 273 million shares to cover the greenshoe option in case of strong demand. The offering will end on October 31, with listing date tentatively set on November 7.

The company has earmarked up to 2.19 billion shares or 80 percent of the offering to foreign investors, while as much as 546.44 million shares will be sold locally.

The Philippine Stock Exchange and the Securities and Exchange Commission have cleared STI's follow-on offering.

The shares to be issued will be taken out of STI’s increase in its authorized capital stock from P551.50 million to P5 billion, which the SEC already approved.

Net proceeds will partly finance the company’s capital expenditures of P3.918 billion for 2013. This will finance land acquisition, construction of school buildings and purchase of school equipment and furniture.

UBS is the sole global coordinator, sole bookrunner, international co-lead manager and joint lead domestic underwriter, while Religare Capital Markets is the international co-lead manager and First Metro Investment Corp. the joint lead domestic underwriter.

STI is the holding company for the education business of Tanco. It owns all wholly owned and franchised STI schools, Philippine Women's University, Jose Abad Santos Memorial School and iAcademy.

The secondary share sale will also increase STI's free float, which at end-June stood at 8.78 percent, below the bourse's minimum requirement of 10 percent.

In 2010, Tanco bought a 68-percent stake in dormant firm JTH Davies Holdings Inc. from Philippine Racing Club. STI used JTH to list at the local bourse through the backdoor.