Cemex prices IPO at P10.75 per share

Cemex Holdings Philippines Inc. has priced its initial public offering (IPO) at P10.75 per share.

In a disclosure to the Philippine Stock Exchange, Cemex said it is offering 2.03 billion shares with an option to sell another 304.95 million shares to cover additional demand. The IPO shares represent 45 percent of the company's capital stock.

The proceeds from the IPO, expected at P22 billion plus P3.27 billion from the over-allotment option, will be used to pay debts owed to a subsidiary of parent CEMEX and BDO Unibank Inc.

The second IPO for the year is one of the biggest since 2013 when Robinsons Retail Holdings Inc. raised more than P42 billion.

The first was Golden Haven Memorial Parks Inc. which debuted on the PSE on Wednesday.

Indirectly owned by Mexico's CEMEX S.A.B, one of the largest cement companies in the world in terms of output capacity, Cemex has decided to lower the IPO price from P17 apiece it earlier announced.

At P10.75 per share, the Cemex IPO is a reasonable investment since a lower IPO price will attract more investors as it leaves them more upside room, said Jonathan Latuja, research analyst at the Unicapital Securities Inc.

“The ability to price and launch the deal amidst volatility is a testament to the strong fundamentals and growth prospects of the company. Retail investors can take the cue from the strong institutional demand and should take a look at the offer," said Eduardo V. Francisco, president of BDO Capital & Investment Corp., the domestic lead underwriter of the transaction.

The offer period is from July 4 to 11, and the will be listed on the Philippine Stock Exchange (PSE) on July 18 under the ticker symbol CHP.

“We are delighted by the strong participation that we have received from institutional investors for our IPO notwithstanding events in Europe. We take this as a sign of the investors’ confidence in the long-term prospects of CHP and, more importantly, the Philippines as a whole," said Cemex Chairman and President Pedro Jose Palomino.

The proceeds from the IPO, expected at P22 billion, will be used to pay debt owed to a subsidiary of parent CEMEX and BDO Unibank Inc.

Citigroup Global Markets Ltd., The Hongkong and Shanghai Banking Corp. Ltd., Singapore Branch and J.P. Morgan Securities PLC are the joint global coordinators and joint bookrunners. – VDS, GMA News