EEI EYES P 6-B CAPITAL BUILDUP
Yuchengco group-led construction firm EEI Corp. plans to raise as much as P6 billion from the public offering of perpetual preferred shares before the end of the year.
According to a preliminary prospectus filed in the Securities and Exchange Commission (SEC), EEI plans to issue up to 60 million nonvoting perpetual preferred shares at an offer price of P100 a share to be listed on the Philippine Stock Exchange (PSE) by December.
The base offer will consist of 40 million preferred shares but there will be an option to upsize by another 20 million shares.
Mandated as sole issue manager was RCBC Capital, which will also be a joint lead underwriter and book runner together with SB Capital.
The preferred shares will be issued in two series, one will have an optional redemption feature in five years, while the other will have redemption option by the seventh year.
Subject to approvals by the SEC and PSE, EEI targets to run the offering from Nov. 29 to Dec. 3 this year and list the preferred shares on the exchange on Dec. 16.
EEI will use proceeds from the offering to partially finance future projects, acquire new equipment, pay existing short-term loans, and fund general corporate and working capital requirements.
One of the leading construction companies in the Philippines, EEI is celebrating its 90th year this year.
EEI has bagged a portion of the Metro Manila Subway Project together with Shimizu Corp., Fujita Corp. and Takenaka Civil Engineering. Aside from its role as the local joint venture partner, EEI anticipates that a substantial portion of the project will be undertaken by EEI as a subcontractor. With a total project cost of P355.6 billion over at least seven years of project life cycle, it expects that a significant amount of working capital will be required to support the subcontracting works.
More projects eyed
The Malolos Clark Railway Project (MCRP) package 4, with a project cost of P21.4 billion, has been awarded to the joint venture of Acciona Construction Philippines Inc. and EEI. Aside from being a joint venture partner, EEI also expects to play a significant role as a subcontractor. For the same MCRP line, EEI was also appointed as subcontractor in one of the packages that was awarded to a different consortium.
In partnership with foreign construction firms, EEI has also participated in the bidding for several packages of the South Commuter Railway Project (SCRP). It aims to win subcontractor service contract in other SCRP packages.
There are several other roads, expressways, railways, bridges, airports and piers under the government’s “Build, build, build” program that EEI plans to participate in.
Typically, the float between spending for construction inputs and money coming in through billing collections ranges from P250 million to P500 million for big infrastructure projects and usually has a 30- to 45-day cycle.