First Metro to underwrite P1-B Philtread rights offer

First Metro Investment Corp., the investment banking arm of the Metrobank Group, will participate in underwriting the P1-billion rights offering of publicly-listed Philtread Holdings Corp. (Philtread).

The rights offer is the third major deal undertaken by First Metro Investment in the first four months of the year. In the pipeline are major financial undertakings such as the P10-billion retail Treasury bonds, and a still-undisclosed fund-raising activity by the Home Guarantee Corp. (HGC).

Philtread will offer 499,997,540 new unclassified common shares of stock with a par value of P1 at an offer price of P2 per share.

This will be accompanied by 99,999,508 detachable warrants to subscribe to 99,999,508 new unclassified shares at the exercise price of P2 per share.

Offer period will be from April 28 to May 12, 2003.

Proceeds from the offering will be utilized to partially finance the acquisition of ATR-Kim Eng Capital Partners Inc. (ATRKE Capital), an independent investment house in the Philippines with total assets estimated at P1.7 billion.

ATRKE Capital’s primary business is investment banking, focusing on corporate finance and fixed income, securities brokerage, and trust services.

Philtread’s acquisition of ATRKE Capital is part of the company’s transformation into a diversified financial services company.

Philtread will be renamed ATR Kim Eng Financial Corp.

First Metro Investment was recently given the mandate to be the financial advisor, issue manager, and lead underwriter for the P5-billion fund-raising activity of state-owned Philippine Postal Corp. (Philpost).

"That would be in preparation for its eventual privatization," Roberto Juanchito T. Dispo, First Metro Investment senior vice president, said.

It is also the lead underwriter of the P1.5-billion bond offer of AMA Education Corp. and AMA Computer University Inc. It is the first IT-education bond issue in the country.

In 2002, the total capital raised by First Metro was P82 billion, or approximately $1.5 billion.

In the first quarter of 2003, the investment house of the Metrobank Group reported a net income of P122 million or roughly 13 percent better than the P108 million realized in the same period in 2002.

Net income for the whole of 2002 reached a modest P401.3 million, slipping a little over two percent from the P410.3 million recorded in 2001. "The investment climate especially the capital markets performed horribly last year," Dispo told reporters.

Last year also reflected lower gross resources of P11.9 billion or a 28-percent drop from the P16.6 billion it had in 2002.

Capital funds handled last year reached P7.4 billion which was better than the P6.9 billion in 2002, but lower by 3.8 percent from the high of P7.7 billion recorded in 2000. – Ted Torres