Two mid-size firms set initial offerings

Two medium-sized companies are all set for their respective initial public offerings (IPOs) with combined net proceeds of nearly P194 million on Monday, Dec. 3, at the Philippine Stock Exchange.

Adhesive and sealant maker Federal Chemicals Inc. and thrift bank Citystate Savings Bank Inc. will simultaneously start their IPOs on that date at the offer price of P7 per share and P11.55 per share, respectively.

FedChem will utilize the estimated net proceeds of P81.9 million mainly for working capital, repayment of trust receipts and investments in interest-bearing government securities while CityState said its P112-million net proceeds will be used to finance its branch expansion, modernization, and likewise in loans and investments in bonds and similar securities.

Although both firms will start their IPOs on Monday, only FedChem has set its listing date this month, tentatively scheduled on Dec. 21, making it only the third entity to list at the stock market this year after IT firm SQL*Wizard and property developer Primex Corp.

CityState, however, will start off the year 2002 for the PSE, as it has tentatively set its listing date on Jan. 3.

Based on its IPO form, FedChem will offer 12.508 million common shares to the public, with RCBC Capital Corp. as lead underwriter and issue manager. A total of 37.5 million in outstanding shares will eventually be listed out of FedChem’s authorized capital stock of P100 million divided into 100 million shares with a par value of P1 each.

The company locally manufactures and markets several types of adhesives and sealants used by the hardware, construction and leathergoods industries. Among its products are FedSeal Elastometric Sealant, Surebond and Bondy contact cement brands.

It is also the exclusive Philippine distributor of products from Orgavyl Chemical Industries BHd., a leading publicly-listed company based in Malaysia, offering a wide array of industrial and household do-it-yourself adhesives and sealants.

Last year, the company posted total sales of P98.6 million, from P70.6 million in 1999 while net income rose from P171,000 to P411,000. In the first seven months of 2001, however, sales already reached P87.2 million while profit surged to P4.8 million.

CityState, on the other hand, will offer 11.1 million new common shares to be lead managed and underwritten by Abacus Capital & Investment Corp.

The share offer will represent 25.17 percent of the bank’s issued and capital outstanding capital stock of 44.1 million common shares, with a par value of P10 per share.

Registered as a bank entity on May 20, 1997, CityState was incorporated by a group of Filipino businessmen led by Col. Antonio L. Cabangon-Chua and Alfredo G. Siy. It was granted a Bangko Sentral license to operate as a thrift bank on Aug. 7 of the same year and has increased its authorized capital to P1 billion.

The bank began commercial operations in 1997 with the opening of its first branch in Chino Roces Avenue in Makati, expanding to a total of 12 branches since then, including its head office at the Citystate Center Building along Shaw Blvd. in Pasig. Nine of its branches are in Metro Manila, two are in Bulacan and one in Cebu City.

The bank’s principal foreign shareholder is the Citystate Holdings Bank Pte. Ltd. (CHPL), a Singaporean investment and financial holdings corporation.

Last year, CityState posted a net income of P1.759 million, a turnaround from the P6.936 million loss in 1999. But in the first six months of this year, the bank reverted to a net loss of P3.434 million.