IPO application of microfinance firm approved

THE PHILIPPINE Stock Exchange has approved the planned initial public offering (IPO) of microfinance firm AG Finance Inc. worth about P149.76 million.

Based on the offering memorandum posted by the PSE yesterday, AG Finance—which provides microfinance and consumer loans—plans to offer up to 68.07 million primary common shares at a price range of P1.91 and P2.20 per share.

The offer price is expected to be finalized today while the offering to the public will run from July 30 to Aug. 5. The stock trading debut on the PSE’s main board is targeted for Aug. 13.

The planned IPO will bring to public hands 26 percent of the company’s ownership. The company is led by the King family.

Acting as issue manager and lead underwriter is Banco de Oro Unibank’s investment banking unit, BDO Capital & Investment Corp.

Proceeds from the offering are meant to finance the company’s professional and skilled overseas Filipino worker (OFW) loan portfolio expansion program. About P47 million is targeted for additional disbursement this year and in 2014. Portion of the IPO proceeds will also be used to repay outstanding loans with China Bank amounting to P37 million, which is falling due this month.

As of the end of March this year, AG Finance had P280.9 million in loans and receivables and P344 million in assets. It has an authorized capital stock of P550 million.

The microfinance firm was established in 2011 to provide short-term, unsecured credit facilities to permanent rank-and-file employees of reputable medium-sized companies in the Philippines.

In 2003, AG Finance expanded its market coverage to include professionals and skilled workers in North America and the Middle East.

AG Finance has since established operations in 20 countries targeting overseas Filipinos. It is currently focused on Australia, Canada and Middle East. It has 4,000 active borrowers.

The microfinance firm provides salary and emergency loans amounting to P10,000 to P50,000 payable over 12 months via salary deduction arrangements.

Loans to overseas Filipinos amount to P50,000 payable over 12 to 18 months via postdated checks.