MANILA, Philippines — Citicore Energy REIT Corp. (CREIT), the country’s first energy real estate investment trust (REIT), is targeting a wider investor base after it slashed its initial public offering (IPO) price.
The share price was reduced from P3.15 to P2.55 per share to reach a wider investor base.
“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,” CREIT president and CEO Oliver Tan 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),” he said.
CREIT commenced its offer period yesterday after obtaining a permit to sell from the Securities and Exchange Commission (SEC) to offer 2.18 billion common shares with an over-allotment option of up to 327.27 million common shares.
Based on its prospectus, the offer period will run from Feb 2 to 8, with a target Philippine Stock Exchange listing date of Feb. 17.
Net proceeds from the IPO, amounting to P6.4 billion, will be used to acquire properties within the Citicore Group, particularly to fund the properties owned by Citicore Solar Bulacan and nv vogt Philippines Solar Energy One Inc. (SE1 or Citicore South Cotabato).
Citicore Bulacan and Citicore South Cotabato operate solar power plants on such properties and are wholly owned indirect subsidiaries of Citicore Renewable Energy Corp. (CREC).
Post IPO, CREIT will have a resulting public float of around 38.3 percent, assuming the full exercise of the over-allotment option, and will be compliant with the required public ownership of 33.33 percent based on the Revised REIT Implementing Rules and Regulations (IRR).
The company’s sponsor, Citicore Renewable Energy Corp. (CREC), has decided to raise its stake in CREIT from an initial 57.4 percent to 66 percent net of the over-allotment option, by rightsizing its offer size.
It said 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.
Post-offer, CREIT plans to implement a dividend payout of at least 95 percent of its distributable income for the preceding year (subject to availability of unrestricted retained earnings and compliance with applicable laws), 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 apiece, CREIT’s implied dividend yields based on projected 2022 and 2023 earnings are seven percent and 7.4 percent, respectively, based on the final REIT plan.
The underwriting syndicate is led by Unicapital Inc., BDO Capital and Investment Corp., PNB Capital and Investment Corp., Investment & Capital Corporation of the Philippines (ICCP), CLSA Ltd. and CIMB Investment Bank Bhd (international bookrunners).
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