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Saturday, August 1, 2015

SBS maiden share sale oversubscribed

BDO Capital & Investment Corp. President Eduardo V. Francisco told reporters the share sale is “several times” oversubscribed, allowing the company to price the IPO at a maximum P2.75 per share.

The offer period for the IPO began yesterday, while the shares will be listed on the PSE’s Main Board on August 10 under the ticker symbol “SBS.”

BDO Capital was tapped as the sole issue manager, lead underwriter and bookrunner.

“As of this moment, all the institutional shares have been allocated.

The only thing available are the shares for the brokers,” Mr. Francisco told an investor briefing late Monday.

“Even if the market falls, I don’t think these investors will back out,” he said.

Ten percent of the shares for sale are allocated for small investors, who trooped to the Philippine Stock Exchange building in Ortigas on Tuesday only to find IPO forms have run out, Mr. Francisco said.

“Yes, demand continues to be strong,” he said in a mobile phone message yesterday.

The second company to go public this year, SBS is selling up to 420 million primary common shares, comprising 35% of the company’s issued and outstanding shares.

The absence of other IPOs this year had whet demand for the tiny IPO, Lexter L. Azurin, head of research at Unicapital Securities, Inc., said in a phone interview.

“It’s a leading chemical distributor and the products they offer are pretty diversified. Earnings growth since 2012 has been consistent,” Mr. Azurin said.

SBS grew earnings by 66% to P100.17 million last year from P60.33 million in 2013, as revenues rose 18.7% to P933.08 million from P785.95 million.

The Sytengco family owns 93.2% of SBS. The IPO will leave the family with 60.6% of the company.

SBS Chairman and President Necisto U. Sytengco said the company is going public to lay the groundwork for succession.

“It’s always better to put it in proper place so there won’t be any problem in the succession. Probably, you can even hire your own children to come in or you can hire professional people to put them in place,” Mr. Sytengco said.

Incorporated on July 17, 2001 and formerly known as Sytengco Philippines Corp., SBS supplies over 3,000 chemical products to more than 1,800 customers in various industries: food ingredients, industrial, feeds and veterinary care, pharmaceutical, personal care and cosmetics.

- Business World Online

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