Makati Finance Corp. to undertake IPO this year

Makati Finance Corp., a financing firm controlled by a Filipino-Singaporean group, will attempt to break into the stock market this year with an initial public offering (IPO) to raise about P40 million to finance its lending activities and pay off some of its debts.

MFC is 51-percent owned by Amalgamated Investment Bancorporation, an investment house owned by a Singaporean-Filipino group that specializes in money market operations, trading, debt and equity underwriting, and mergers and acquisitions.

The company filed its registration papers at the Securities and Exchange Commission (SEC) last May and its IPO application at the Philippine Stock Exchange (PSE) on Aug. 30.

Under the PSE’s new rules, the process for listing applications will be shortened from84 trading days to only 59 days, basically through the expeditious processing and review at the Listing Department from 45 days to 20 days.

Based on documents filed at the SEC, MFC plans to offer between 18.6 million and 27.7 million new common shares, representing 25.18 percent to 33.39 percent of its outstanding capital stock.

Once the IPO pushes through, MFC will be the sixth company to go public this year and only the second issue to be listed at the Small and Medium Enterprise (SME) Board after software and technology vendor SQL*Wizard Inc.

Abacus Capital and Investment Corp., the lead underwriter for the IPO, will sell the shares at a price range of P1.17 to P1.50 apiece, based on a price-earning multiple of 8.32 to 11.98 times MFC’s projected 2002 earnings.

The company reported a turnaround in its financial performance in 2000 as it reported a net income of P9.04 million compared with a P582 million net loss the previous year.

MFC was incorporated on Feb. 17, 1966 as Makati Investment and Finance Corp. It initially engaged in stock dealership functions, extension of credit lines and the acceptance of placements but by the mid ’70s, it changed focus to leasing and financing operations and adopted its current corporate name.

As a credit institution, MFC provided clients with real estate, appliance and fleet car financing.

MFC said half of the net proceeds from the IPO will be used to retire the company’s outstanding notes payable, which currently have an average interest rates of about 14 percent and have various maturity dates within the year.

The remaining half will be used to fund loans provided to medical professionals.