Citicore Renewable Energy sets IPO price at 30% discount

Citicore Renewable Energy [CREC 2.70 pre-IPO] [link] advised the exchange that it has priced its IPO at P2.70/share, which is a 30% discount to the P3.88/share placeholder maximum price from its preliminary prospectus. This brings the maximum value of the IPO transaction to CREC’s shareholders down from P6.9 billion to P4.8 billion. The ~268 million shares in the overallotment option are secondary, so the proceeds of their sale will go to the selling shareholders and not to CREC.

MB BOTTOM-LINE: The initial maximum value of the IPO from the preliminary prospectus is not important; it’s basically just a placeholder that they use to build out the offer and loosely ballpark an enterprise valuation. The real number – the one that they go ahead with at the IPO – is always going to come as a result of the underwriters working the phones with institutional investors and potential anchor investors. They don’t just pick a nice number out of the air that they think will sell the shares and give investors some upside. This is a number that will clear the board and sell all the shares. Full steam ahead for the May 27 offer start.
 

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