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Wednesday, November 5, 2014

Phoenix Semiconductor prices IPO below the ceiling

The local arm of one of Samsung's South Korean suppliers has set the price of its initial public offering (IPO) below the ceiling.

In a letter to the Philippine Stock Exchange, BDO Capital and Investments Corp president Ed Francisco said Phoenix Semiconductor Philippines Corp pegged the final offer price at P3.15 per share, allowing the company to raise P1.02 billion from the maiden share sale.

Including the oversubscription option, gross proceeds from the IPO will increase to P1.45 billion.

'We did not price at the maximum so there is an upside for investors," Francisco said. BDO Capital is the sole issue manager and lead underwriter of the offering.

The final offer price is equivalent to a price-earnings (PE) ratio of 9.5 times 2014 earnings, a source said. PE is a valuation tool that measures how much an investor is paying for every peso in earnings generated by a company.

Phoenix Semiconductor chief finance officer Kim Dong Joo had projected a growth of at least 10 percent in earnings this year from $4.24 million in 2013 on the back of a 16 percent expansion in revenues from $209.68 million last year.

The company is selling 459.39 million shares, including the 134.63 million shares to cover the oversubscription option. It will have a market capitalization of P6.82 billion after the offering.

The offer period will run from November 10 to 21. The shares will be listed on the Main Board of the PSE on December 1.

Net proceeds from the primary offer will be used to fund Phoenix Semiconductor's expansion program through the acquisition of machines, building improvement and the construction of a new facility within its 15-hectare area at the Clark Freeport Zone in Pampanga.

The expansion program will enable the company to serve new clients. At present, Phoenix Semiconductor serves only Samsung Electronics Co Ltd and its customers.

Phoenix Semiconductor is a unit of STS Semiconductor & Telecommunications Co Ltd. STS is 28.10 percent owned by Seoul-based Bokwang Co Ltd, which has businesses in leisure, retail, advertising and culture, financial services and manufacturing.

- Interaksyon

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