Strong demand seen for Eagle Cement IPO

EAGLE CEMENT Corp. (ECC) expects strong demand from both institutional and retail investors for its P8.6-billion initial public offering (IPO), attracted by the company’s production efficiency, strong brand equity, and sound financials, the underwriter of the issue said.

“The issue was well received by institutional and retail investors alike and we are confident that Eagle will keep this momentum as it launches the offer,” SB Capital Investment Corp. President Aurelio Noel G. Dayrit was quoted as saying in a statement.

SB Capital is one of the joint lead underwriters of the IPO, along with China Bank Capital Corp. and Philippine National Bank Capital and Investment Corp.

“The investors’ warm response is a strong indication of confidence in Eagle’s fundamentals and potential to be the major driver of the Philippine cement industry,” Mr. Dayrit said.

ECC priced the IPO at P15 apiece. The cement firm of tycoon Ramon S. Ang will conduct a primary offer of 500 million shares worth P7.5 billion. An over allotment option of 75 million shares will enable the firm to raise up to P1.125 billion more.

The offer period began on May 15 and will end on May 22, as the company targets to debut on the bourse by May 29.

Upon listing, Eagle Cement will have a public float of 11.5% out of its total 5,000,000,005 outstanding common shares.

Net proceeds of the IPO will be used to finance the company’s expansion, particularly the construction of a fourth production line in Cebu that will add 2 million tons to the firm’s capacity. ECC will also be building marine terminals in Cebu and Davao, in an effort to stamp the “Eagle” brand in the regions.

Even before the expansion in Cebu, ECC is already looking to be the largest cement firm in the country in terms of capacity with the completion of the third production line in its Bulacan plant by 2018. By next year, ECC will have a total capacity of 7.1 million tons per annum. —