Why Did Maynilad Cut its IPO Price to P15 Per Share?
The country's largest private utility concessionaire Maynilad Water Services, Inc. (PSE: MYNLD) has set a final offer price for its initial public offering (IPO) at P15 per share after feedback from cornerstone investors. This paves the way for an offering that could reach P34.3 billion.
Maynilad had initially set a P20 per share offering that would have totaled about P37 billion.
The IPO, which is slated to go public no later than November 7, could be the biggest listing since Monde Nissin's P48-billion raise in 2021, and only the second after Cebu-based fuel retailer Top Line Business Development Corp.'s P732.6 million offering in April.
Based on a notice from the local bourse Philippine Stock Exchange (PSE), some of the concessionaire's investores include the United Kingdom's Mobilist, International Finance Corp. (IFC), and the Asian Development Bank.
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The final list price comes after Maynilad submitted a preliminary prospectus to the PSE for potential investors, which contains the distributor's information on business and financial accounts to serve as rundown on its current trajectory.
Maynilad President and CEO Ramoncito Fernandez earlier said that the preparations were meant to foster broader public participation while ensuring everything was above board and that the company has complied with all regulatory processes.
With the final IPO of P15 per share, Maynilad could raise as much as P34.3 billion in gross proceeds which it said would be utilized for capital expenditiures and general corporate purposes, according to Maynilad's preliminary prospectus.
Broken down, investors such as the IFC and ADB are considering investments in the amounts of $100 million and $145 million respectively.
Robeco Switzerland Ltd. has also expressed interesed in investing up to $20 million in the offering, with other potential investors including Abrdn Malaysia Sdn. Bhd., Maven Investment Partners Ltd.'s Hong Kong branch, and Maybank Asset Management Singapore Pte. Ltd. and QRT Master Fund – Torus Fund SP.
Maynilad has tapped BPI BPI Capital Corp. Hongkong and Shanghai Banking Corp. Limited (HSBC), Morgan Stanley Asia and UBS AG as joint global coordinators and bookrunners for the IPO, which is likely to be worth more than $500 million (nearly P30 billion)
The Securities and Exchange Commission greenlit Maynilad's IPO last June. The company initally scheduled the IPO for July but postponed it earlier this month to allow cornerstone investors more time to paritcipate and for them to get a grasp on how the company gets things done.
The company's chairman Manny Pangilinan already broke the news that month that his firm had bagged a commitment from one of its planned cornerstone investors.
Based on the company's 25-year legislative franchise, Maynilad must list its shares by January 2027 and to go public with least 30 percent of its outstanding capital stock.
Maynilad is already set to offer as many as 1.66 billion common shares to the public and 24.9 million in primary shares for First Pacific Co. Ltd, with an overallotment option of as many as 249.05 million shares. The IPO will also have an upsize option of 357.4 million secondary shares, which could potentially bring the total offer to 2.29 billion shares.
It provides potable water and wastewater services to 11 cities in Metro Manila and parts of Cavite.
