Robinsons Land raises $223M via shares offer

Gokongwei-owned property firm Robinsons Land Corp. (RLC) has raised $223 million from the successful offering of new and secondary shares in both international and local markets, according to stock brokerage house UBS.

In a press briefing yesterday, UBS (Philippines) chief representative Lauro Baja said the issue was 2.4 times oversubscribed with 44 percent of the institutional investors coming from the United States, 41 percent from Asia and 15 percent from Europe. Of the $223-million proceeds, $95 million was raised from the primary share offering.

"It was very well subscribed. Investors like Robinsons because of its strong cash generation business. It had a perfect timing. The government’s fiscal position has significantly improved," Baja said.

UBS Securities Philippines Inc. executive director and country head Robrina L. Go said the RLC issue was well covered only three days from pricing of the shares. "It was the first equity transaction since the market corrected in July."

The successful offering was also attributed to the property boom and RLC’s improving governance.

Baja said there has been a growing appetite for Philippine equities given the continued improvement of the country’s fiscal position, robust remittances from overseas Filipino wokers, and falling interest rates.

UBS is sole international underwriter and book runner for the RLC issue.

RLC offered a total of 811.14 million shares to both local and foreign investors at P12 per share, representing a 7.7-percent discount to the weighted average price of the shares for the 10 trading days ended Sept. 22. Of this amount, 770.585 million had been sold in international markets while the balance of 40.55 million was offered locally. ATR Kim Eng Securities was the lead domestic underwriter.

The company has set aside up to 121.67 million common shares in case there is oversubscription of shares. Listing of the shares has been set on Oct. 5.

Proceeds from the offering will be used to partly finance capital expenditures for fiscal year 2007, amounting to P7.03 billion. Bulk of the capital budget or P2.72 billion will be used for the development of residential buildings. Another P2.25 billion will go to the improvement of existing malls and P1.3 billion for the construction of new ones.

About P436 million has been earmarked for the development of housing subdivision projects while some P323.1 million has been set aside for hotel improvement and construction.

Upon completion of the offer, RLC’s minimum public float will increase to 40 percent from seven percent.

RLC is building seven new malls in Davao, Tagaytay, Dumaguete, Sucat, Manila, Pangasinan, and General Santos. These new malls are expected to be completed next year or in 2008.

The company is also completing the redevelopment of a portion of Robinsons Galleria mall to be called West Wing, and Robinsons Ermita.

RLC remains focused on the lucrative middle-market residential housing as it aims to launch at least three projects this year including East of Galleria, a high-rise residential condominium located in Ortigas business district.

As for its office buildings, RLC expects to complete the construction of Robinsons Cybergate Center Tower 2, an office building complex designed for call centers and BPO firms.

As for the housing segment, RLC intends to focus on the middle-income market for lots with options for housing priced at a range of P600,000 to P2 million.