SEC approves EEI’s P540-M rights offer

The Securities and Exchange Commission has approved the P540-million stock rights offering of the Yuchengco-controlled EEI Corp., one of the largest construction firms in the country.

EEI will offer up to 120 million new common shares at P4.50 each. RCBC Capital Corp. is the issue manager and lead underwriter for the offering.

As of end 2006, EEI had an authorized capital stock of P2.12 billion, composed of two billion common shares with a par value of P1 and 240 million preferred shares with a par value of P0.50.

Net proceeds from the offering, estimated at P520.9 million, will be used to retire bank debt (P318 million) and fund ongoing projects (P202.9 million) such as Rio-Tuba 2 with JG, Petro FCC of Petron with Daelim, and The Shang Grand Tower with Kuok Properties. Total estimated costs and expenses of these three projects amount to P2.84 billion.

EEI intends to fully repay all outstanding obligations plus accrued interest within 30 days after the listing of the shares, which has been set for April 2007.

As of end-Sept. 2006, EEI had total short-term debt of P1.815 billion and P119 million in long-term debt.

EEI posted a net income of P200 million last year or more than three times the previous level, driven by higher revenues. For this year, the company is eyeing a net profit of P300 million.

Revenues amounted to P5.26 billion in 2006 compared with only P4.17 billion a year earlier. The company booked orders and contracts worth P12 billion in 2006 or 3.53 times higher than the previous year’s P3.4 billion.

Among EEI’s projects include The Residences at Greenbelt and three phases of Serendra of Ayala Land Inc., the Fairways Tower of Philtown in Fort Bonifacio and the GA 2 Tower of Globe Asiatique in Mandaluyong City.

EEI was awarded the general construction contract for the 60-storey St. Francis Shang Towers of Kuok Properties, reputedly the tallest building in the country when completed. The company also participated in key infrastructure projects — the new Iloilo Airport, the Subic-Clark-Tarlac Expressway, the NAIA Skyway Ramp 1 & 4 and the expansion packages of three major terminal stations of LRT 1.

EEI also acquired various packages worth $180 million for the plant construction and fabrication and erection of furnaces of the Eastern Petrochemical Company’s petrochemical facilities in the new Jubail Olefins Complex in the Kingdom of Saudi Arabia, one of the largest ever awarded in recent years to a Philippine contractor.

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