Robinsons Retail sets P42-B IPO

MANILA, Philippines - The Gokongwei family’s Robinsons Retail Holdings Inc. has secured the Securities and Exchange Commission’s  approval for a P42-billion share sale, paving the way for one of the country’s largest initial public offerings (IPO).

Fresh funds from the upsized IPO will allow the company behind Robinsons supermarkets and department stores to put up new stores and renovate existing branches, the company said.

In a notice, the SEC en banc said it approved the IPO of the retail holding firm late last week.

Robinsons Retail plans to sell up to 484.75 million shares at maximum price of P86.64 each that will generate up to P41.99 billion in fresh capital.

The retail giant is planning to sell 461.89 million shares primary shares and 22.85 million shares through the overallotment option, which was not specified in its previous IPO application.

Of the primary shares that are expected to raise P39.05 billion, 323.32 million shares will be sold to foreign investors and the remaining 138.56 million shares will be allotted to domestic investors.

“(Robinsons Retail)  intends to use majority of the net proceeds from the primary offer to partially fund capital expenditures in connection with the establishment of new stores,” the company said.

The remaining capital will be used to fund renovation of existing stores and repayment of all outstanding bank loans, it added.

Specifically, P33.59 billion or 86 percent of the proceeds will be used for the expansion of Robinsons Supermarkets, Robinsons Department Stores, and DIY, specialty, drug and convenience stores.

Robinsons Retail said it will spend P2.89 billion to renovate existing branches, P1.71 billion to pay existing debts and P850 million for other corporate purposes.

The retail group of property giant Robinsons Land Corp. claims to be the country’s second largest retailer, next only to SM Retail Inc. of Henry Sy.

Robinsons Retail Group owns and operates 35 department stores and 73 supermarkets nationwide.

The IPO will be facilitated by joint global coordinators and international lead managers UBS, Deutsche Bank and J.P. Morgan, and domestic lead underwriter Maybank ATR KimEng Capital Partners Inc.

The approval for the aggressive IPO comes at a time when the local stock market is facing volatilities due to foreign fund outflows and geopolitical tensions in the Middle East.

From hitting the 31st all-time high this year at 7,392.20 on May 15, benchmark Philippine Stock Exchange index slipped to an eight-month low at 5,738.06 on Aug. 28. The bellwether index recovered to 6,075.17 on Friday.

The IPO of Robinsons Retail, which was previously scheduled late in 2013 but was deferred to an unspecified date due to market volatility in June, could be one of the largest share sale of a Filipino company.

In April, LT Group Inc. of taipan Lucio Tan raised a record P37.72 billion in its follow-on offering while SM Investments Corp. secured P28.75 billion during its IPO in 2005.

Robinsons Retail is under conglomerate JG Summit Holdings Inc., which is also into budget airline (Cebu Pacific), banking (Robinsons Bank Corp.), petrochemicals (JG Summit Petrochemicals Corp.), and snacks and beverage (Universal Robina Corp.).