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Tuesday, December 2, 2014

Phoenix Semiconductors flat on Philippine stock market debut

Shares in Phoenix Semiconductors Philippines Corp closed flat on its stock market debut on Monday, as other upcoming listings prompted investors to lock in their gains.

The local arm of one of Samsung's South Korean suppliers saw its stock open at P3.40 per share, an increase of 7.94 percent from its listing price of P3.15 apiece. The stock pared its gains to finish unchanged for the session.

"It's satisfactory. It opened strong, but the gains became unsustainable due to some liquidity issues. The listings are simultaneous and being the first, it became the victim of profit-taking on its first day of trading," said Jose Vistan of AB Capital Securities Inc.

Xurpas Inc, Megawide Construction Corp and Integrated Micro-Electronics Inc have recently concluded their respective equity offerings and are set to list their shares in the next few days. The Philippine Stock Exchange index advanced 0.51 percent.

Phoenix Semiconductor raised P1 billion from the sale of 459.39 million shares with institutional investors cornering half of the total offer and the issuance enjoying "very strong support" from the retail market," BDO Capital & Investment Corp senior vice president Gabriel Lim told reporters on the sidelines of the company's listing ceremony.

BDO Capital is the sole issue manager and lead underwriter of the offering.

Phoenix Semiconductor decided not to exercise the overallotment option of 134.63 million shares because the base offer will be enough to cover financing for its expansion, Lim added.

"Because several local banks also began offering credit facilities to the company to finance the expansion program, the company felt it would be best to finance expansion program from equity and credit facilities offered by banks. It's a good signal because more banks were confident in the company," he said.

Net proceeds from the primary offer will be used to fund Phoenix Semiconductor's $170-million 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.

Phoenix Semiconductor chief finance officer Kim Dong Joo said the expansion program will enable the company to serve new clients with the manufacturer now in talks with a Japanese company and 2-3 American firms.

The company’s operation solely serves the requirements of Samsung Electronics Co Ltd and its customers.

Phoenix Semiconductor is considering a third phase of expansion of its manufacturing operations that may entail the production of non-memory products in three to five years, Kim said, noting that its manufacturing operations in the Philippines is 30 percent cheaper than China mainly because of labor costs.

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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