SEC approval sought for Cebu Landmasters’ IPO

The approval of the Securities and Exchange Commission (SEC) had been sought for the planned market debut of Cebu-based property developer Cebu Landmasters, Inc. (CLI), which is now hoping to raise nearly R4 billion to fund its expansion.

In its recent filing submitted to the SEC, CLI, the leading homegrown developer in Metro Cebu, said it intends to raise up to R3.8 billion from initial public offering (IPO) scheduled for May.

CLI is particularly listing and selling firm shares of 505 million common shares with an over-allotment option of 75 million shares at the Philippine Stock Exchange (PSE). The IPO will be priced at up to R6.56 per share.

This represents up to 34 percent of the company’s outstanding common shares post-IPO.

Of the firm shares, 430 million are new shares forming the primary tranche, while 75 million are exist- ing shares forming the secondary tranche. The 75 million shares from the greenshoe will be from existing shareholders.

The proceeds from the offering will be used by the company to fund its land acquisition strategy as well as the development costs for its expansion plans to five key cities in Visayas and Mindanao.

“We will use our flexibility to create new developments in the cities of Davao, Cagayan de Oro, Dumaguete, Bacolod, Iloilo and new Cebu locations. These projects will maximize the demand and supply indicators in each location with the best uses for each site,” CLI president and chief executive officer Jose Soberano III said in a separate statement.

Part of the proceeds will also be used for debt repayment and working capital requirements.

BDO Capital will serve as the sole issue manager for CLI’s stock market debut, while the joint lead underwriters and joint bookrunners are BDO Capital and BPI Capital.

CLI is the first Cebu-based real estate developer to apply for an IPO this year.

The company accounts for 11 percent market share of the total supply of residential condominium units in Metro Cebu, second only to Ayala Land, according to a market study by CBRE Philippines (now Santos Knight Frank).

In 2016, Cebu Landmasters generated revenues of R2.17 billion and net profits of R702 million.

Soberano explained that its being a homegrown company allows it to tap the best suppliers and best deals in VisMin locations and to pass on the savings to customers.

“Being value-focused Visayans ourselves, we have a good idea of the kind of spaces clients appreciate and how much they will willingly pay for them,” Soberano said.

Aside from CLI, there are also a good number of other IPOs waiting for SEC approval.

Technology company Audiowav Media, Inc., for one, said it intends to be the first company to do IPO at the PSE this year.

Aside from CLI and Audiwav, pending IPO applications at the SEC include those of Wilcon Depot, Inc.’s (R7.92 billion), Xeleb Technologies, Inc. (R736 million), Audiowav Media, Inc. (R2.66 billion), Gweilo Corp. (R125 million), Pointwest Technologies Corp. (R2.21 billion), Green Power Panay Philippines (R222.8 million).

Philippine Primark Properties, Inc. already got SEC approval for its maiden share sale but has not yet started its planned share sale as well as D.M. Wenceslao & Associates, Inc. and Datem, Inc.

Four companies have concluded their IPOs in the PSE last year, including Shakey’s, Pilipinas Shell, cemetery operator Golden Haven Memorial Park Inc., and Cemex Holdings Philippines.