UnionBank stock rights offering price to range from P54.48 to P58.38

MANILA, Philippines — Union Bank of the Philippines is set to offer shares to existing shareholders at a range of P54.48 to P58.38 per share under its upcoming stock rights offering (SRO).

The bank will offer up to 220.26 million common shares to existing shareholders between Jan. 16 and 27, with an option to extend or terminate the offer period.

The proposed fund raising activity aims to raise as much as P12 billion instead of the earlier announced P20 billion, as additional capital requirements could be funded by the bank’s existing businesses.

Based on the preliminary offer terms sheet, the offer price was determined by computing the volume-weighted average price of UnionBank’s common shares on the Philippine Stock Exchange (PSE) for each of the 15 consecutive trading days immediately prior to and including Oct. 28, 2022, and applying a discount of approximately 25 to 30 percent.

In late October last year, the bank’s board of directors approved capital raising activities of up to P20 billion, which may take in the form of a stock rights offering to all existing shareholders or a private placement, subject to market conditions.

“The bank’s latest balance sheet projections based on its economic outlook shows that any additional capital requirements beyond P12 billion can be internally generated from existing businesses,” UnionBank said in a recent disclosure.

The bank said proceeds from the fund raising activity would be used to fund the capital infusion of Union Digital Bank and for other general corporate purposes.

Furthermore, the amount to be raised would also finance loan availments by retail, corporate, and commercial customers, as well as for other growth opportunities such as investment securities and other assets.

In May last year,  UnionBank raised P40 billion through a stock rights offering to partially fund the acquisition of the retail banking business of global banking giant Citigroup Inc. in the Philippines.

The following month, it raised another P11 billion after investors swarmed the first-ever digital peso bond issuance in the Philippines. The fund raising activity, part of the bank’s P39 billion bond program, was oversubscribed as it originally pegged the size at P1 billion.

The bank ended up spending P72 billion instead of P55 billion to acquire Citi’s retail banking business in the Philippines