BDO Capital convinces Phoenix Semiconductor to go for lower IPO price

There is strong demand for the initial share sale of South Korean-owned Phoenix Semiconductor Philippines Corp., but the basic consideration for pricing the initial public offering (IPO) shares was to give the upside so the shares can still go higher once listed on the exchange, underwriter BDO Capital & Investment Corp. told GMA News Online on Thursday 

 

The semiconductor manufacturer agreed to price its IPO at P3.15 apiece, a 19 percent discount from the maximum P3.76 per share.

 

In a filing with the Philippine Stock Exchange, Phoenix Semiconductor said it is offering 324.76 million common shares, with an option to issue 134.63 million more to cover any oversubscription.

 

This will allow the company to raise P1.023 billion.

 

"Despite strong demand, we convinced client to give upside," BDO Capital president Eduardo Francisco said in a text message to told GMA News Online. "We priced below the maximum price from 3.75 to 3.15."

 

Upside is the peso or percentage amount by which a stock could rise, or basically an educated guess on how high a stock could go in the near future.

 

"Korean companies and PSPC suppliers have placed orders as sign of support," Francisco added.

 

Seventy percent of the IPO shares are allotted to qualified institutional buyers, 20 percent to the investing public and 10 percent to local small investors.

 

Last June 24, the Securities and Exchange Commission en banc approved the Phoenix Semiconductor IPO.

 

In July, Phoenix Semiconductor vice president and CFO Kim Dong Joo told GMA News Online the company will use the proceeds from the share sale to expand its manufacturing plant in Clark Freeport with a view to meeting the requirements of smartphone makers outside its premier customer Samsung Electronics.

 

The chipmaker currently holds a six-year supply contract with Samsung Electronics Co. Ltd. until 2017.

 

Phoenix Semiconductor is fourth company listing on the Philippine Stock Exchange (PSE) this year, after retailer SSI Group Inc. debuts on the PSE Friday, November 7.

 

DoubleDragon Properties Corp., the property firm jointly owned by Jollibee Foods Corp. chairman Tony Tan Caktiong and business partner Edgar “Injap” Sia II was the first to debut on the PSE in April.

 

Tuna canner Century Pacific Food Inc. followed suit when it listed in May. – VS, GMA News