Cosco Capital raises P17B from share sale

MANILA, Philippines - Cosco Capital Inc. of retail tycoon Lucio Co has raised nearly P17 billion in fresh capital from the sale of existing and new shares to investors.

The investment holding firm is now poised to grow its retail, liquor and real estate businesses due to the capital infusion, company officials said.

In a disclosure, Cosco Capital said it sold 1.6 billion shares at P10.50 each, generating P16.8 billion ($400 million). Its shares closed at P15 prior to the transaction.

Stephen Cu Unjieng, Asian branch chairman of financial adviser Evercore Partners, said Cosco Capital sold $300 million worth of new shares and $100 million of existing shares.

Cu Unjieng said bulk of the investors came from Asia, with allocations for European fund managers.

Given the robust economic growth in Asia, companies focusing on the consumer sector have attracted the interest of investors.

Cosco Capital planned to sell as much as two billion common shares to qualified institutional buyers in the Philippines and foreign institutional investors.

“Cosco Capital will be a focused retail conglomerate. We would like to expand those businesses related or complementary to retail,” said company president Leonardo Dayao.

Of the proceeds, 50 percent will be used to expand the selling area of Puregold-anchored commercial real estate properties and increase the oil and petroleum storage of Pure Petroleum, he said.

Around 20 percent is allotted for the acquisition of non-food retail businesses like hardwares and pharmacies, he added.

Another 20 percent was allocated for debt payments and the remaining 10 percent to improve its distribution network.

Cosco Capital, formerly Alcorn Gold Resources Corp., earlier announced that it needs P12 billion (around $293 million) to take advantage of growth opportunities and pay existing debts.

The Co family injected into Cosco Capital its 51-percent stake in country’s second largest grocery chain Puregold and a portfolio of liquor distribution companies, commercial real estate firms and an oil storage business.

In the first quarter, Cosco Capital said its net income surged to P801 million from P193 million a year ago.

Its revenues surged 51 percent to P17.1 billion on the back of a 50 percent sales growth for the retail business, 116 percent for real estate, 33 percent for liquor and 100 percent for oil storage.