JG Summit sets 2-stage fund-raising program

MANILA, Philippines - JG Summit Holdings Inc., the flagship investment holding firm of the family of tycoon John Gokongwei,   expects its public float to widen to above 35 percent when it completes a two-stage fund-raising program.

In a special stockholders meeting yesterday, JG Summit president and chief operating officer Lance Gokongwei said the share issuance is one of two options the company is looking at to raise funds. Tapping the debt market is another option, he said.

Gokongwei said there is no timetable yet on the proposed share offering, pointing out that the timing would be subject to market conditions

Shareholders approved yesterday a plan of the company to sell up to 2.087 billion shares to fund the construction of a naptha cracker plant, which entails an investment of around $700 million over the next three years, and repay debt. The next stage would be the purchase of the same volume of newly issued shares at the same price.

JG Summit closed 5.3 percent higher yesterday at P20 each share. At Thursday’s close, the offering would be worth P41.74 billion.

Shares of JG Summit have risen almost three times last year, ending at P19.60 after hitting a peak of P27 in September and November. 

The naptha plant, located in Sto. Tomas, Batangas, will produce polymer-grade ethylene and propylene, pyrolysis gas and by-products such as fuel gas, fuel oil and acid gas at an annual capacity of 925,537 metric tons. It is slated for completion in 2013.

Shareholders of the company likewise approved a plan to raise JG Summit’s authorized capital stock from P14.85 billion to P14.89 billion and to create four billion voting and non-redeemable preferred shares with a par value of P0.01.

JG Summit is engaged in various businesses which include branded consumer foods, agro-industrial and commodity food products, property development and hotel management, telecommunications, air transportation, petrochemicals and international capital and financial services.