Calapan Ventures sees grand IPO debut

MANILA, Philippines - Utility firm Calapan Ventures Inc. (CVI) is expected to have a grand debut in the local bourse with the market continuing to show signs of resiliency in the midst of external pressures.

Leonardo ‘Dong’ R. Arguelles Jr., managing director of leading underwriter Unicapital Inc., said the recent successful initial public offering (IPO) of technology firm Cirtek Holdings Philippines Corp. bodes well for the listing of Calapan Ventures Inc. on Nov. 24.

“The success of the Cirtek IPO is a manifestation of the healthy IPO market in the Philippines despite the anxiety in the European and US market,” Arguelles emphasized.

Unicapital Inc., which serves as the sole underwriter for Calapan Ventures Inc.’s IPO is the issue manager and lead underwriter of the Cirtek offering.

Arguelles noted that Calapan Ventures’s strength lies in the fact that its business is a very basic need. “Everyone needs water. The reliability of CVI’s waterworks system brought convenience to Calapan’s populace while its improved systems efficiency ramped up the utility’s shareholder’s value,” he added.

Aside from these considerations, Calapan Ventures has shown its capacity to replicate its success in areas as far as Tabuk City. “The business model implemented by the management will serve as a launching pad for acquiring and operating other water works system,” Arguelles said.

Through its IPO, Calapan Ventures gives small investors the opportunity to become shareholders of the company. “Demand for Calapan Ventures was easily three times oversubscribed, and the local small investor’s portion was swamped by a lot of investors,” he stressed.

“CVI’s offer price is only P2.50 per share, and the minimum subscription is 1,000 shares. With only P2,500, they become stakeholders of the company. A lot of small investors see that as an attractive investment considering the stability of our revenue stream, our growth potential, as well as the social impact of our projects,“ Ortrud T. Yao, company chief finance officer, said.

The company plans to expand its water storage facilities, in particular the construction of an overhead reservoir, and the installation of transmission and distribution lines from the reservoir to the water system. It also plans to spend the bigger chunk of the proceeds on zoning works in 26 barangays for installation of district meters and isolation valves.

The company currently services 8,613 households in 32 barangays in Calapan. At present, it has an O&M (operation and management) contract with the local government of Tabuk City, up north in Kalinga.

Although Calapan Ventures is currently a small player, Yao said its decision to go public via the IPO will allow the company to grow faster.

Calapan Ventures Inc. is a wholly-owned subsidiary of Jolliville Holdings Corp., which has business interests in leasing, management services, business process outsourcing, property development and land banking, water utility and power generation.

For inquiries, call Pam Victoriano of Unicapital, Inc. at 8920991, or send email to [email protected], or visit www.h2o.ph.