Makati Finance Corp marks debut at bourse’s SME board tomorrow

Makati Finance Corp. (MFC) will mark its debut at the equities market tomorrow as it prepares to list its stocks at the Small and Medium Enterprises (SME) board of the Philippine Stock Exchange, the first entry for the new year.

The local financing firm, one of the country’s most profitable, wrapped up its initial public offering (IPO) last December, generating about P23.4 million in net proceeds from the float of 19.56 million of its primary common shares priced at P1.38 each.

The IPO opened up 26 percent of MFC’s outstanding capital stock to the public and will eventually channel the proceeds for the financing of its lending activities and the retirement of its notes payable.

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 Philippines; Cesar 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 building; 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 only 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.

Being its core operations, MFC said it has formulated plans to expands its lending operations that will guarantee sustained growth. While its lending activities and loan products will still be focused on the niche consumer loan and SME markets due to the experience it has gained from these segments, the company said it will also undertake steps to raise the quality of service it provides to its current and future clients.

In 2001, 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. According to a ranking by the industry’s Philippine Finance Association (PFA), it ranked 18th in net income from a field of 177 members nationwide.

By the end of last year, MFC is expected to post profits of P10.06 million, improving to P11.1 million in 2003 and P12.1 million by 2004.

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