By Arra B. Francia
THE PHILIPPINES’ richest man, Manuel B. Villar, Jr., is taking his home improvement chain public this year in a bid to raise up to P20.7 billion to finance its expansion.
In a preliminary prospectus posted on its Web site Wednesday, All Home Corp. said it will offer up to 1.125 billion shares priced at up to P16 each, consisting of 750 million primary shares held by the company and up to 375 million shares to be offered by a selling shareholder, All Value Holdings Corp.
The initial public offering (IPO) will also include up to 168.75 million shares as part of the over-allotment option.
Considering only the primary shares in the offer, All Home expects to net P11.46 billion from the IPO. The company said it will not receive proceeds from the sale of shares held by All Value Holdings.
Of projected net proceeds, All Home plans to use P6.858 billion for capital expenditure and initial working capital for store expansion.
It plans to disburse the funds from the fourth quarter of 2019 to the second quarter of 2020.
The company has 19 new stores lined up for this semester, in addition to 19 new stores in 2020.
It will also expand AllHome Alabang to boost its net selling space to about 12,340 square meters (sq.m.), from 5.845 sq.m. currently.
About P4.565 billion will be used for debt repayment by the fourth quarter of 2019, as the company has P4.603 billion in loans from several local banks.
The remaining P37 million will go to general corporate purposes.
On the other hand, All Value Holdings could net up to P5.635 billion from the sale of its shares in All Home, and up to P8.198 billion including the over-allotment option.
The company looks to finalize the IPO price on Sept. 16, then offer the shares to investors from Sept. 18 to 24 in time for listing at the Philippine Stock Exchange on Oct. 1 under the ticker “HOME.”
All Home engaged UBS AG, Singapore Branch as the offer’s sole global coordinator and joint book runner, while CLSA Limited and Credit Suisse (Singapore) Limited were tapped as joint book runners.
PNB Capital and Investment Corp. will act as local lead underwriter, while China Bank Capital Corp. will be a co-led local underwriter.
Incorporated in 2013, All Home has since established 25 stores with a net selling space of about 196,327 sq.m. Nineteen of these are in Mega Manila, three in Luzon and three in the Visayas and Mindanao.
It operates three formats, namely large mall-based store, large free-standing store and small specialty store.
All Home booked a net profit of P207.1 million in the first quarter of 2019, almost five times the P43.6 million it recorded in the same period a year ago. This came on the back of a 68% uptick in revenues to P2.38 billion in the same period.
If approved and should it proceed, All Home could be the first company to go public this year after drought in maiden offerings last semester. This comes amid a recovery in the benchmark PSE index, which is now trading at the 8,200 level.
“I think it is perfect timing for them to do this IPO. Market has started to go up. Villar stocks have very good performance which is a good sign for investors,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in a mobile phone message when sought for comment.
Mr. Mangun also noted that news of the firm’s IPO could be the reason why its competitor, Wilcon Depot, Inc., has dropped by a total of seven percent in the last four trading sessions to P15.70 on Thursday.
Philstocks Financial, Inc. Research Associate Japhet Louis O. Tantiangco also noted that the company’s IPO comes alongside the PSEi’s rally, which could boost its debut.
“The company has bright prospects. At the same time, we have a market that’s already trying to hold its ground in the bull territory,” Mr. Tantiangco said in a separate text message.
“Given these, I believe there will be appetite from investors if the IPO pushes through.”