Corporate News

By Arra B. Francia

Financial service aggregator Expresspay plans P528-M IPO

Posted on May 03, 2017

FINANCIAL service aggregator Expresspay, Inc. is planning to make its debut on the stock market this year with an initial public offering (IPO) for as much as P528 million.

Expresspay sought the Securities and Exchange Commission’s approval to list on the Small, Medium and Emerging (SME) Board of the Philippine Stock Exchange (PSE) on June 19, with the ticker “XP.”

In its preliminary prospectus, Expresspay said it is looking to sell as much as 193.5 million primary shares at an offer price of up to P2.73 each, to raise as much as P528 million.

The maiden share sale will allow public investors to own 26% of the company, which primarily deals with providing information technology solutions to banks, financial institutions, and other entities. The 193.5 million shares will add to Expresspay’s 550.6 million issued and outstanding common shares.

Expresspay tapped Unicapital, Inc. to be the issue manager and underwriter for the IPO.

The offer price will be set on June 2, while the offer period will be from June 5 to 9. Listing date is set for June 19.

Expresspay expects to net P478.41 million from the IPO, which will be used to set up outlets throughout the country and to develop mobile-based payment platforms.

From the proceeds, Expresspay said it will allocate P80 million to set up 100 company-owned outlets in Visayas and Mindanao, as well as head offices in Cebu and Davao. A total of P100 million will be used for the promotion of the Expresspay brand through various marketing programs, while P120 million is allotted for business development opportunities.

The company is also planning to spend P50 million to improve its online infrastructure, P20 million for the development of an e-wallet mobile application, and P10 million for a mobile-based platform for cooperatives.

The remaining P98.41 million will be allotted for general working capital requirements in the latter half of 2017.

Expresspay currently has 1,031 outlets nationwide, 90% of which are based in Luzon and 47% in the National Capital Region. It employs an “e-payment system” to provide the unbanked sector with access to financial and nonfinancial services.

In 2016, Expresspay said its net income surged 205% to P25.8 million, from the P8.5 million in 2015. Revenues stood at P134.1 million, mainly from franchise setup fees and services.

“Logistics is one of the business models that a lot of businessmen are interested in right now. I think it will perform well,” Diversified Securities, Inc. equities trader Aniceto K. Pangan said in a phone interview.

Mr. Pangan cited the Metro Pacific group’s entry into the logistics sector through the acquisition of Ace Logistics and the Sy family’s recent partnership with 2GO Group, Inc.

“With the kind of economy that we’re having, an online financial system of payment company will definitely help boost the rate of payments,” Mr. Pangan said.

Expresspay joins the growing number of companies seeking to go public this year. Eagle Cement Corp. (P8 billion), Cebu Landmasters, Inc. (P3.8 billion), Bermaz Auto Bhd. (P1.24 billion) and Pure Energy Holdings Corp. (P1.58 billion) have already secured SEC approval to proceed with their respective IPOs.

“The sustainability of the economy is at that standpoint level, that a number of IPOs are taking advantage to have their companies publicly listed,” Mr. Pangan added.

Still pending with the SEC are IPO applications from Xeleb Technologies, Inc. for P751.8 million, Audiowav Media, Inc. for P2.66 billion, and most recently Chelsea Logistics for P8 billion.

Wilcon Depot, Inc. set the stage for companies willing to list on the stock exchange this year, after raising P7.03 billion in its debut on March 31.