Citicore Energy REIT Corp., has kicked off its P6.39-billion initial public offering (IPO), which will be the country’s first listed energy real estate investment trust (REIT).
The company’s offer period will run through February 8 and its shares will be listed on the Philippine Stock Exchange on February 17 under the ticker symbol CREIT.
The company is offering some 2.49 billion in common shares, which consists of 1.04 billion in primary common shares, 1.13 billion shares in secondary offering and an over-allotment option of 327.27 million, all with a par value of P0.25. It will be sold at an offer price of P2.55 apiece, or down from its initial indicative price of P3.15 apiece. Some 70 percent of its offering will be allocated for the institutional investors and the rest to the local market.
The company’s sponsor, Citicore Renewable Energy Corp. (CREC), has decided to increase its stake in CREIT to 66 percent from an initial 57.4 percent, net of the over-allotment option, by reducing its offer size.
“The move reflects the sponsor’s vote of confidence in the company’s long-term sustainable growth and pursuit of a net zero carbon future for all,” it said.
After its IPO, it will have a public float of 38.3 percent, assuming the full exercise of the over-allotment option, which is above the required public ownership of 33.33 percent based on the revised REIT implementing rules and regulations (IRR).
“The company believes that a more affordable pricing will allow a broader set of investors to participate in CREIT’s value proposition, especially since these individuals and institutions will be our long-term partners,” Oliver Tan, the company’s president and CEO, said.
“What we want to offer in CREIT is a sustainable investment in various aspects – economical, for the investor; social, for the communities; and environmental, towards a zero-carbon future.”
The company said it intends to use the net proceeds from the primary offer to acquire properties within the Citicore group, such as those owned by Citicore Solar Bulacan Inc., Citicore South Cotabato or alternative properties of the sponsors.
Post-offer, CREIT plans to implement a dividend payout of at least 95 percent of its distributable income for the preceding year, which is a premium over the required dividend payout of at least 90 percent based on the REIT IRR.
At an IPO price of P2.55 per share, CREIT’s implied dividend yields based on projected 2022 and 2023 earnings are 7 percent and 7.4 percent, respectively.
“We would also like to express our most sincere gratitude to our regulators, the SEC and the Philippine Stock Exchange as well as our underwriting syndicate, for their continued guidance and assistance to ensure that this landmark offering comes to fruition,” Tan added.
CREIT tapped Unicapital Inc. and BDO Capital and Investment Corp. as joint global coordinators for the offer. Unicapital will also serve as lead underwriter and issue manager. BDO Capital will serve as lead local underwriter alongside PNB Capital and Investment Corp., while Investment and Capital Corp. of the Philippines will act as participating underwriter and CIMB Investment Bank Bhd and CLSA Limited as international bookrunners.
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