SEC okays P9.68-B AUB IPO

MANILA, Philippines - Commercial lender Asia United Bank (AUB) of the Rebisco Group has moved closer to debuting in the local bourse through a P9.68-billion initial public offering (IPO).

The Securities and Exchange Commission (SEC) on Monday approved the listing of AUB, which will be the second IPO in the local stock market this year.

In an en banc decision, the corporate regulator allowed AUB to sell 88 million shares, including an over-allotment option of eight million shares, at a maximum price of P110 per share. Hence, the IPO will generate as much as P9.68 billion for the lender.

The final price of the shares up for sale will be announced on May 3, with the offer period to start on May 7 and end on May 14.

AUB said its shares will be listed on the Philippine Stock Exchange on May 17. It will be the second IPO this year, following the P3.2-billion share sale of thrift lender Philippine Business Bank in February.

AUB is owned by a consortium of Filipino industrialists, Taiwanese investment banks and Singapore venture capitalists. Republic Biscuit Corp. (Rebisco), the Philippines’ leading manufacturer, distributor, and exporter of snack food products, owns 44 percent of AUB.

“AUB has evaluated its capital in light of its business strategy and determined that the offer would further solidify the bank’s capital adequacy and financial strength and, more importantly, allow AUB to pursue its strategic growth initiatives,” the lender said.

Specifically, the strategic growth initiatives include “the continued expansion of its branch network via organic and inorganic means.”

“We have a very good base in small and medium enterprises. We continue to support that segment quite well,” said chairman Jacinto Ng Jr., treasurer of the Rebisco Group.

The IPO is also part of the process to secure a universal banking license from the Bangko Sentral ng Pilipinas, Ng said.

As of end-2012, the 15-year-old bank had 107 branches.

AUB said it needs P5.7 billion for general corporate purposes while allotting P1 billion each for acquisitions of bank licenses and expansion of branch network.

The lender also plans to “expand its credit and balance sheet to meet increased demand from the growing economy.”

AUB will upgrade its technology infrastructure to enhance the core banking, enterprise content management, workflow systems, electronic and mobile banking distribution channels.

The lender said it will enter into partnerships in terms of financial payments including debit, credit and prepaid cards.

Joint bookrunners and joint lead managers for the IPO are UBS Ag (Hong Kong branch) and Credit Suisse (Singapore) Ltd.

In June, AUB completed the integration of the 28-branch network of Asiatrust Development Bank Inc., which specializes in the small and medium enterprises market.

AUB, a medium-sized commercial bank, had total assets worth P64.94 billion as of last year. In 2012, its profits jumped to P1.42 billion from P1.12 billion a year ago on higher trading and securities gain.

AUB has been in a selective acquisition mode since 2009. It took over Rural Bank of Angeles, which has four branches and two satellite offices in Pampanga, boosting its presence outside Metro Manila. Its acquisition of the Cooperative Bank of Cavite is awaiting BSP approval.

Other existing shareholders of AUB are Kuo Yu Philipppines Holdings Inc., Lambda Holdings Corp. and Singapore-based Magis Equity Ventures.