P 3.2-B IPO OF VILLAR’S INFRA-THEMED REIT CLEARED
Billionaire Manuel Villar Jr.’s Premiere Island Power REIT Corp. has set the offer period of its P3.2 billion initial public offering (IPO) from Nov. 28 to Dec. 5 this year.
The Philippine Stock Exchange (PSE) on Tuesday approved the company’s listing application, making it the ninth IPO for the year and the seventh publicly-traded firm within Villar’s group.
The IPO shares will be priced on Wednesday (Nov. 23) while the company’s target trading debut, under the stock symbol “PREIT,” is set for Dec. 15 this year, according to the PSE.
PREIT is a power and infrastructure-themed real estate investment trust (REIT), whose earnings are mainly distributed to shareholders as dividends.
Based on the deal prospectus, the company is projecting a “base case” divided payout of 6.9 percent in 2022 and 7.2 percent in 2023.
“REITs have become a popular asset class among investor in the last two and a half years. We welcome more listings in this space to expand the REIT options available to investors,” PSE president and CEO Ramon Monzon said in a statement on Friday.
PREIT’s initial portfolio consists of land and power plant assets utilized in the power generation projects of S.I. Power Corp. (Sipcor) and Camotes Island Power Generation Corp. (Campcor) in Cebu and Siquijor, which have a total combined installed capacity of 21.2 megawatts.
The offering
The IPO involves the sale of up to 1.4 billion common shares priced at P2 per share plus an option to sell another 210 million shares for its stabilization fund.
The shares are secondary stocks, meaning the proceeds will go to the selling shareholders, Sipcor and Campcor, which are controlled by Villar.
REITs are designed to allow developers of assets with recurring income to sell down their shares and recycle the money to fund more projects.
In this case, proceeds will be used by sponsors to acquire and develop real estate that will be leased to affiliate PAVI Green Renewable Energy Inc. for its various projects.
VFund Management Inc. and VProperty Management Inc. have been tapped as fund manager and property manager, respectively.
Moreover, China Bank Capital Corp. was hired as sole issue manager, underwriter and bookrunner for the IPO, while RCBC Capital Corp. serves as participating underwriter.