By Keren Concepcion G. Valmonte, Reporter

CITICORE Energy REIT Corp. (CREIT) started the offer period for its P6.4-billion initial public offering (IPO) on Wednesday after securing a permit to sell from the Securities and Exchange Commission (SEC).

CREIT is sponsored by Citicore Renewable Energy Corp. It will be the country’s first energy-focused real estate investment trust (REIT), following five REIT listings with office-leasing portfolios.

“While primarily the asset portfolio of the REIT consists of solar plants, it is open to look at other renewable technologies,” CREIT President and Chief Executive Officer Oliver Y. Tan said during an investors’ briefing on Wednesday, adding that the company already started constructing a run-of-river hydro project.

Proceeds from the offer will be used to acquire properties in Bulacan and South Cotabato.

The company currently has five properties in its portfolio — the Clark solar power plant, Armenia property, Toledo property, Silay property, and the Dalayap Property. CREIT leases these properties to the Citicore group.

“The Lessees operate solar power plants on the Leased Properties with a total combined installed capacity of 123.7MWpDC (megawatt-peak direct current),” CREIT said in its final prospectus dated Jan. 27, 2022.

Philstocks Financial, Inc. noted that the company’s lessees might benefit from the Philippines’ renewable energy road map.

“CREIT’s growth is seen to depend on the country’s renewable energy sector which is, in turn, seen to have bright prospects as the local economy’s recovery and next growth phase is expected to require more energy while supply remains tight,” Philstocks Financial said in a report.

The company will be selling to the public over 2.18 billion common shares at an offer price of P2.55 apiece, a 19% discount from the P3.15 ceiling it set. The company said it set its IPO price “more reasonably” to attract 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,” Mr. Tan said in a statement on Wednesday.

“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 added.

With the P2.55 tag, the company’s implied dividend yields based on its projected earnings stand at 7% for 2022 and 7.4% for 2023.

“This is higher than its peers’ average of 5.76% based on their offer prices. Unlike other office-leasing REITs, CREIT enjoys guaranteed lease income throughout its lessees’ term,” Philstocks Financial said.

CREIT has a base offer of 2,181,819,000 and an overallotment option of up to 327,273,000 common shares. Should the over-allotment option be fully-exercised, the company’s public float post-IPO would stand at 38.3%.

The company’s offer period will last until next week Tuesday, Feb. 8. Its listing on the main board of the Philippine Stock Exchange is scheduled on Feb. 17, under the ticker symbol “CREIT.”

CREIT engaged Unicapital, Inc., BDO Capital and Investment Corp., PNB Capital and Investment Corp., Investment & Capital Corp. of the Philippines, CLSA Ltd., and CIMB Investment Bank Bhd to be part of the transaction’s underwriting syndicate.

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