GMA Network to raise P7.76 billion from initial public offer

REPORT FROM BUSINESSWORLD Television giant GMA Network, Inc. will raise P7.76 billion from its initial public offering (IPO) and sale of Philippine depository receipts (PDRs) on July 30 after its offer price was set at P8.50 apiece. On the sidelines of the signing of the IPO documents, ATR-Kim Eng Capital Partners, Inc. Managing Director Roberto C. Benares said P8.50 was the top of the offer price range. The 13-day international road show Hong Kong, Singapore, London, Boston and New York secured 70% of the funding requirements of the company. "What is driving interest is the GMA name; it is a marquee name. Arguably, GMA is number one in Mega Manila. People truly believe they will continue to earn money and have good profit and revenue growth. When we tell you the number of times, it is unprecedented...it is definitely higher since the market came back three years ago," he told reporters. Last June 27, the Philippine Stock Exchange approved the application of GMA Network and GMA Holdings, Inc. to list under the first board. The first board requires companies that want to list to have profitable operations for three years; market capitalization of P500 million; or net tangible assets of P500 million, provided that they have been operational for five years. The offer price range was P7 to P8.50 per offer share and per PDR. "The global market is huge. We cannot even think it is going to get drained. At any point in time, there must be IPOs in Hong Kong and China. Although domestic liqidity has certain limitations, it is a non-issue (in this offering). People who have never invested in stocks are calling us for shares," Mr. Benares added. Former GMA Network President Menardo R. Jimenez said going public was a "dream come true for all of us." The company, whose valuation has gone up to P42 billion from P16 billion in 2000, explored the possibility of conducting the public listing three years ago. "It is our sincere commitment to investors and viewers an even bigger and better GMA Network in the next decade. We promise to strive even harder not only to deliver great financial reward but also those invisible to the eye such as responsible shaping of the minds of the Filipinos and achieving global recognition of Filipino talent," Mr. Jimenez added. The domestic offering corners 30% of the combined offer of 91.35 million primary common shares and 822.12 million PDRs relating to 91.35 million primary common shares and 730.77 million secondary common shares. The domestic offering period will run from July 17 to 24. For small investors, the allocation is P8,500 or 1,000 shares per investor and deadline will be on July 23. Deutsche Bank AG is the sole global coordinator, bookrunner and joint lead manager. ATR-Kim Eng Capital is the joint lead manager and issue manager. PSE President Francis Lim said, "We are extremely happy that GMA is finally going public since market has been waiting for this. There is no reason why it should not be oversubscribed." He noted the market is also anticipating the listing by way of introduction of eTelecare Global Solutions, Inc. and the market debut of personal care products manufacturer Splash Corp. this year. Asked when oil giant Pilipinas Shell Petroleum Corp. will list in the exchange, Mr. Lim said he will meet with the officials of the company. "I have to pursue all these things since it is a stronger market. I want to know what exactly is the status of Shell," he added. — Ruby Anne M. Rubio/BusinessWorld