SEC okays Puregold's P10.8-B IPO

MANILA, Philippines - The Securities and Exchange Commission has cleared Puregold Price Club Inc.’s application for an initial public offering (IPO) to raise as much as P10.8 billion.

Based on its prospectus submitted to the SEC, Puregold will sell up to 500 million new shares through a primary offering and 100 million existing shares held by majority shareholders at a price of up to P18 each.

The company has an option to sell 90 million more shares depending on market demand.

Hong kong and Shanghai Banking Corp. Ltd., and UBS AG were tapped as international lead managers for the issue while BDO Capital & Investment Corp. and First Metro Investment Corp. will serve as domestic lead underwriters.

Evercore Partners, on the other hand, is Puregold’s financial adviser.

Of the estimated maximum proceeds, Puregold is expected to receive P9 billion while the selling shareholders will get P1.8 billion.

Puregold intends to use the proceeds from the offering to fund new store openings and settle certain loan obligations to China Banking Corp., Metrobank and Banco De Oro.

Up to 420 million shares will be offered overseas while the remaining 180 million shares will be sold to domestic investors. The offer shares represent approximately 34.5 percent of the issued and outstanding capital of the company after completion of the offer.

Puregold is the second largest retailer among hypermarkets and supermarkets in the country. From just a single store in 1998, it has grown to 72 branches in 20 cities and 22 municipalities throughout Metro Manila and the main island of Luzon as of July 22, 2011.

In the six months ending June this year, the company posted a net income of P782.8 million, up 269 percent from P782.8 million a year earlier. Net sales likewise grew 41 percent to P17.3 billion.