Corporate News

Calata pegs share price at high end of range for May 10 IPO

Posted on May 07, 2012

FARM SUPPLIER Calata Corp., has settled on the high end of an earlier price range for its initial public offering (IPO) ahead of its listing debut on the local bourse later this month.

Calata plans to sell shares for P7.50 apiece according to a disclosure issued Friday, translating into a P270.09-million offer size for what would be the Philippine Stock Exchange’s (PSE) third IPO for the year.

The Bulacan-based firm will be listing 36.012 million common shares on the PSE’s second board on May 23 following an offer period slated on May 10 to 16.

This represents a 20% stake in the firm, according to earlier reports.

“We are very happy with the price. A lot of people are very keen to invest due to the company’s track record and very good long-term prospects,� Zandro L. Zulueta, chief executive officer of Calata consultant Absolute Traders & Consulting Services, Inc. told BusinessWorld in a text message sent late Friday.

The PSE approved Calata’s IPO last April 26, the third for the year following holding firm GT Capital Holdings, Inc., which went public on April 20, and Gotianun-led East West Banking Corp., which will be listing on the PSE today.

Both listing exercises have so far seen strong demand.

GT Capital had fully exercised the overallotment option for its IPO to cater to foreign demand. The overallotment places the total issue size at P21.6 billion.

The Ty-led firm, the first domestic company to go public this year, closed more than 8% higher than its initial P455 listing price.

East West’s IPO, meanwhile, was more than three times oversubscribed according to its bookrunners.

After its IPO, EastWest Bank is expected to have a market capitalization of as much as P26.52 billion and a public float level of 25%, according to its listing prospectus.

For its IPO, Calata is confident it can ride an existing wave of optimism for the local agricultural industry and debut strongly on the equities market.

“There are a lot of investors that like the agricultural sector, plus the fact that IPOs have been very hot of late,� Mr. Zulueta said.

Unicapital, Inc. will act as underwriter for the IPO, while Sy-led BDO Unibank, Inc. Trust and Investment Group will serve as stock transfer agent.

Absolute Traders, for its part, will serve as transaction adviser.

Post-IPO, the agricultural firm expects to register a market capitalization of P2.70 billion.

Calata aims to rake in net proceeds of around P242.41 million.

Of this, P109.52 million will be allotted for working capital, P102.20 million for inventory purposes, P24.28 million will be used for site developments and building structures, and P6.42 million for equipment and office suppliers.

This year, Calata plans to roll out 100 Calata Retail Stores in Luzon this in order to firm up its retail network, in addition to the 115 existing Agri Retail Stores currently in operation through the company’s affiliate, Agri Phil Corp.

The retail stores will be erected in strategic locations and will feature trained staff, as well as appealing product packaging and shelving in a bid to market agriculture in a more popular light.

In addition, the company is looking to replicate a customer incentive “rewards coupon� system being implemented among its affiliate’s stores in order to attract customers and boost the appeal of the agriculture sector.

Moving forward, Calata may look into expanding its retail store network in Visayas in order to tap underserved markets in those areas, an earlier BusinessWorld report said.

For 2011, Calata more than doubled its net income to a record P100.17 million from only P33.84 million the year previous.

Meanwhile, sales reportedly grew by 11.11% to P2.0 billion in 2011 versus P1.80 billion the year previous.

Calata, which describes itself as the country’s largest joint-distributor of agrochemicals, feeds and veterinary medicines, was incorporated in July 1999 under the name Planters Choice Agro Products. -- FJGDLF