UnionBank to kick off P10-B stock rights offer

MANILA, Philippines — The stock rights offering of Aboitiz-led Union Bank of the Philippines is set to kick off in May to raise as much as P10 billion to fund the capital infusion of its digital bank and for other general purposes.

Based on its preliminary offer terms sheet submitted to the Philippine Stock Exchange, the bank is offering up to 450 million rights shares to eligible shareholders at a price range of P33.73 to P38.23 per share.

The offer price was determined by computing the volume-weighted average price of UnionBank’s common shares on the PSE for each of the 15 consecutive trading days immediately prior to and excluding May 2, and applying a discount of 15 to 25 percent.

The final price will be determined on May 8, while the offer period will be from May 16 to May 24.

CLSA Exchange Capital Inc. and Unicapital Inc.  are the joint underwriters for the fund raising activity.

Existing shareholders, including Aboitiz Equity Ventures, Insular Life Assurance Co. Inc., and pension fund manager Social Security System  have agreed to subscribe for entitlement shares during the first round of the offer. They may also subscribe to additional rights shares during the second round.

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

The Securities and Exchange Commission  also issued a notice of confirmation of exempt transaction on April 2, which confirmed that the stock rights offer has been exempted from the registration requirements of the Securities Regulation Code.

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.

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

In a virtual media briefing yesterday, UnionBank president and CEO Edwin Bautista said the bank has migrated 1.5 million customers from Citibank to UnionBank in March.

He said that instead of forcing clients from Citibank to use products from UnionBank, UnionBank recreated Citibank’s products and services to provide the new clients a more seamless transition.

“The new customers can now access the different products of UnionBank through mobile banking as well. They’re now completely onboard. They’re now 100 percent with UnionBank,” he said.