UnionBank sets SRO price, entitlement ratio

MANILA, Philippines — Union Bank of the Philippines has pegged the offer price to existing shareholders at P56.88 under its stock rights offering (SRO) scheduled to kick off on Jan. 16.

In a disclosure to the Philippine Stock Exchange, the bank said the offer price was determined based on the volume-weighted average price of its common shares at the stock market for each of the 15 consecutive trading days immediately prior to and excluding Jan. 4, and applying a discount of 30 percent.

The offer price also represents a 36 percent discount over the closing price of UnionBank shares at P89 per share last Jan. 4.

UnionBank said existing shareholders are entitled to one right share of every existing 10.1536 common shares as of record date Jan. 12.

The Aboitiz-led bank is offering 210.97 million shares to raise about P12 billion, lower than the P20 billion announced last October, as additional capital requirements could be funded by its existing businesses.

According to UnionBank, the 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 fundraising activity, part of the bank’s P39 billion bond program, was oversubscribed as it originally pegged the size at P1 billion.

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