Makati Finance ends IPO; listing set next year

Amid a lackluster of equities market, Makati Finance Corp. (MFC) ended yesterday its short initial public offering (IPO) period for local investors and trading participants at the Philippine Stock Exchange (PSE). MFC is only the fifth company to offer its shares to the public this year.

The offer period, which started on Dec. 11, involved 19.56 million primarily common shares, or 26 percent of the company’s outstanding stocks, at a price of P1.38 each.

MFC said the net proceeds of P23.4 million from the IPO will be channeled for the financing of its lending activities and the retirement of its notes payable.

A local financing firm, MFC is a subsidiary of the Amalgamated Investment Bancorporation (AIB), an investment house owned by a Singaporean-Filipino group that specializes in money market operations, trading, debt and equity underwriting, and mergers and acquisitions.

Among the consortium’s investors are the Lorenzo Group, an expanding agribusiness conglomerate which includes Del Monte Phils.; Cezar T. Quiambao, one of the prime movers behind the Skyway and other landmark infrastructure projects; the Benitez Group of Amalgamated Properties, majority owner of the AIB headquarters buildings; and two publicly listed companies in Singapore, namely the government’s SNP Corp. and Hiap Moh Corp.

As a credit institution, MFC provides its clients with real estate, appliance and fleet car financing but its main focus at the moment is lending to medical professionals.

The main product of the company, Rx Cashline, accounted for approximately 90 percent of its total net loan receivables in 2001, making MFC a "first mover" in this particular market niche.

MFC also markets business loans to SMEs, although these loans account for less than 10 percent of its current loan portfolio. Through factoring, the company is able to provide liquidity to SMEs by purchasing their trade receivables.

The company said it also intends to consolidate and strengthen its hold on its current niche market through more aggressive sales and marketing efforts and through the expansion of its operating areas. It likewise plans to introduce leasing facilities for SME businesses.

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

With the completion of the IPO, the company’s outstanding stocks of 74.818 million common shares will be listed for trading at the PSE on Jan. 6, 2003, making it the first company to list in the stock market next year.

MFC’s IPO followed four other companies this year: Salcon Power Corp.; Highland Prime Corp.; Banco de Oro; and Jolliville Holdings. Another new entrant, Citystate Savings Bank, held its IPO in late 2001 and was listed in early 2002.

MFC’s listing will also make it only the second issue to be placed at the Small and Medium Enterprise (SME) board after software and technology vendor SQL*Wizard Inc.