Pepsi to start P7.9-B initial public offering Jan 8

Beverage maker Pepsi-Cola Products Philippines Inc.  is launching the subscription for its P7.9-billion initial public offering (IPO) on Jan. 8, the company said yesterday.

Pepsi plans to sell up to 1.31 billion shares at an indicative price of P6.04 per share.

The company said out of the offer shares, 380.8 million will be issued by way of IPO while 761.6 million will be sold by existing shareholders. An additional 171.4 million shares have also been set aside for over-allotment.

Pepsi’s selling shareholders are Guoco Assets Philippines Inc. and The Nassim Fund.

Up to 799.6 million shares or 70 percent of the total offer will be sold in the international market while the remaining 30 percent or 342.7 million shares will be made available to domestic investors.

The final offer price, which will be determined through an international book-building process, will be known by Jan. 19.

The international book-building exercise will be held on the subscription period from Jan. 8 to 18 while the local offering is slated from Jan. 21 to 28. 

Listing of the shares, meanwhile, has been tentatively scheduled on Feb. 1.

UBS Investment Bank is the lead underwriter for the  international issue while ATR Kim-Eng Capital Partners and BDO Capital and Investment Corp. are the lead underwriters for the  domestic offering.

After the IPO, Pepsi’s market capitalization will stand at P22.31 billion at an offer price of P6.04 per share. 

Net proceeds from the offering will be used to partly finance Pepsi’s capital expenditures for 2008 and 2009.  Of the expected proceeds, Pepsi is estimated to receive about P2.3 billion which will be used to fund its expansion.

About P910 million will go to the acquisition of additional non-carbonated beverage production facilities, P455 million for the expansion of carbonated beverage production, another P455 million for the launch of new products and another P455 million to boost bottling capacity.

Pepsi produces cola and flavored carbonated beverages, including low-calorie derivatives, as well as juices, iced teas, sports drinks and energy drinks. It is known for popular beverage brands Pepsi, Diet Pepsi, Pepsi Light, Pepsi Max and 7Up, Mountain Dew, Gatorade, Lipton Iced Tea, Tropicana, Propel and Sting.

For the fiscal year ending June 30 this year, Pepsi reported a 15.2-percent increase in net profit to P1.001 billion from P868.745 million a year earlier.