SEC fines I-Remit over IPO proceeds

I-Remit Inc., the country’s biggest Filipino-owned, non-bank remittance company, was penalized by the Securities and Exchange Commission (SEC) for allegedly using part of the proceeds of its initial public offering (IPO) last year for purposes other than those it disclosed to the corporate regulator.

According to its earlier filing, I-Remit said the money will be used to finance its expansion in existing and new markets, to augment working capital requirements, and to retire some of the company’s short-term debts.

The SEC had slapped I-Remit with a P100,000 fine.

I-Remit said it will file a motion for reconsideration before the SEC.

Last year’s IPO was five times oversubscribed according to First Metro Investment Corp. (FMIC), the issue manager and lead underwriter.

The company priced the IPO at P4.68 per share, near the midpoint of the offer price range of P4 to P5.77.

FMIC executive vice president Jose Marcelo explained that the allocation for brokers was 20 percent of the IPO or roughly P130 million. Demand reached P660 million or five times more than the allocation.

Of the total offer, 70 percent has been allocated for institutional investors, Marcelo said. Demand reached around P1.78 billion from the allocation set at roughly P480 million.

I-Remit offered 140.604 million common shares to the public, with 107.417 million new shares and 33.187 million old shares held by existing shareholders.

The offer represents 25 percent of the company’s enlarged capital stock.

I-Remit Inc. has revolutionized the remittance industry by employing the latest IT technology utilizing the Internet platform, making it possible to cut down the usual remittance period to as short as several minutes depending on the area and the chosen service mode.