Mirant firms up IPO plans

In what is seen to be the biggest initial public offering (IPO) this year or next year, Mirant Philippines Inc., the largest independent power producer in the country, has formally informed the Philippine Stock Exchange (PSE) of its plan to offer its shares to the public.

A source at the PSE said Mirant has signified its intention to go public although no timetable was given yet. "They said they would go on with the IPO. Not sure though whether it would be this year or next year but they said they would do it," the source said.

The same source said Mirant remains committed to do the IPO, as required under the country’s Electric Power Industry Reform Act, once certain conditions and factors have been addressed.

The lack of good issues has also prompted Mirant to pursue its much-awaited IPO.

Mirant earlier said the IPO could fetch around P18 billion and would likely be handled by First Metro Investment Corp., a unit of the MetroBank Group with whom the power firm has a joint venture – Mirant Global Corp.

The energy firm is expected to list at least 10 percent of its stake in the local bourse, as mandated under the Oil Deregulation Act.

The government, through the Department of Energy (DOE), has been urging Mirant to issue about 10 percent to 15 percent of its share in the PSE as the company has been recognized as the country’s biggest revenue earner for the past years.

Mirant, a wholly-owned subsidiary of US-based Mirant Corp., has been aggressively investing in the Philippines through the establishment of several power plants to entice investors to buy its shares of stock once it decides to go public.

Mirant Global has also signified its intention to offer its shares to the public. It was formed to acquire the 72 megawatt Panay Power Corp. from First Philippine Holdings Corporation. This is in pursuit of power projects in the Visayas region including the 40 MW expansion of the Iloilo power plant.

Other power firms expected to list in the exchange are First Generation Holdings Corp., the holding firm for all the power generation assets of the Lopez-controlled First Philippine Holdings Corp., and PNOC-EC.

PNOC-EC is the exploration arm of the government-controlled Philippine National Oil Co. (PNOC) It holds a 10-percent stake in the country’s biggest natural gas project, Malampaya Natural Gas and has various exploration projects particularly in Visayas and Mindanao.

The Energy Department has also resumed talks with major oil firms Pilipinas Shell Petroleum Corp. and Caltex Philippines to push through with their IPO plans.

Shell and Caltex are both mandated by law to undertake a public offering of shares but have continued to defer the listing of their shares citing poor market conditions. Shell, a unit of Anglo-Dutch giant Royal Dutch/Shell group, earlier said it would seriously consider undertaking an IPO of its shares if the equities market would show some improvements.

After a relatively lean year for IPOs, the PSE is hoping to attract more companies from SMEs to giant multinationals to list their shares and provide the impetus for a long-awaited stock market rally this year.

Among the companies that have already expressed their interest to list are International Exchange Bank, GMA Network Inc. and Fastfood giant McDonalds. IBank, one of the leading commercial banks in the country, plans to list its shares next month or once it secures government’s approval of its IPO application. It plans to offer 4.42 million to 8.35 million primary common shares with a current par value of P100 per share.

The shares represent 15 percent to 25 percent of the bank’s outstanding shares after the IPO and will be offered within the price range of P160 to P190 per share, to raise between P707.2 million and P1.59 billion.

Only one company – PetroEnergy Corp. has so far listed at the PSE this year as investors have opted to stay on the sidelines until after the national elections. Last year, five companies were listed on the exchange – Transpacific Broadcast Group, Cashrounds Makati Finance Corp., Supercity Realty Development and PSE Inc.

The SEC, for its part, is targetting companies registered with the Board of Investments and the country’s top 5,000 corporations to list at the stock exchange. It is also encouraging SEC-registered entities with P50 million in assets and at least 100 million stockholders to list at the PSE in line with efforts to provide the public with more investment choices. Out of the 200,000 corporations registered with the SEC, only 237 are listed and of the 237, only 100 are actively traded.