Citicore Energy REIT gets thumbs up to raise funds through IPO

Citicore Energy REIT Corp. (CREIT) has secured a permit from the Securities and Exchange Commission (SEC) for its plan to raise funds through an initial public offering (IPO).

In a statement, CREIT said the permit to sell was given by the SEC on Wednesday.

The company will offer 2,181,819,000 common shares with an over-allotment option of up to 327,273,000 common shares at an offer price of P2.55 per share.

Post-IPO, the resulting public float of CREIT will be 38.3%, assuming the full exercise of the over-allotment option. It will be above the required public ownership of 33.33% based on the Revised REIT Implementing Rules and Regulations (IRR).

CREIT is the country’s first energy REIT or real estate investment trust.

“The company believes that a more affordable pricing will allow a broader set of investors to participate in CREIT’s value proposition, especially since these individuals and institutions will be our long-term partners,” said Oliver Tan, CREIT president and CEO.

“What we want to offer in CREIT is a sustainable investment in various aspects – economical (for the investor), social (for the communities), and environmental (towards a zero-carbon future),” he added. 

Post-offer, CREIT plans to implement a dividend payout of at least 95% of its distributable income for the preceding year, subject to availability of unrestricted retained earnings and compliance with applicable laws, which is a premium over the required dividend payout of at least 90% based on the REIT IRR. 

At an IPO price of P2.55/share, CREIT said its implied dividend yields based on projected 2022 and 2023 earnings are 7.0% and 7.4%, respectively.

CREIT shares will be offered to the public from February 2 to 8 and scheduled for listing on February 17.

“We would also like to express our most sincere gratitude to our regulators, the SEC and the Philippine Stock Exchange as well as our underwriting syndicate, for their continued guidance and assistance to ensure that this landmark offering comes to fruition,” Tan said.

The company plans to use the net proceeds from the primary offer to acquire properties within the Citicore Group, particularly the properties owned by Citicore Solar Bulacan Inc. in Bulacan, and Philippines Solar Energy One Inc. in South Cotabato.

CREIT has tapped BDO Capital & Investment Corp. and Unicapital Inc. as its joint global coordinator and lead underwriters for the undertaking, with PNB Capital and Investment Corp. as lead local underwriter.

It also tasked CIMB Investment Bank Bhd and CLSA Limited as international bookrunners, and the Investment & Capital Corporation of the Philippines. —VBL, GMA News