Pepsi-Cola scales down IPO price offer

Beverage firm Pepsi-Cola Products Phils. Inc. has scaled down the price range for its planned initial public offering (IPO) this year to P3.50 - P4.30 from an earlier indicative price of P6.04 per share to make the public sale more attractive to investors.

Ed Francisco, president of the issue’s co-lead domestic underwriter BDO Capital Investment Corp., said that with the new price range, the local Pepsi unit may raise as much as P5.65 billion in proceeds which will be plowed back for the company’s nationwide plant expansion program.

 Pepsi will hold the domestic offer from Jan. 21 - 28, with Feb. 1 as the tentative listing date.

The company will float a total of 1.142 billion shares consisting of 380.8 million new shares and 761.6 million secondary shares owned by major stockholders Guoco Assets Phils. Inc. and The Nassim Fund. An additional 171.4 million shares are reserved to cover for the greenshoe or over-allotment option.

Pepsi has 11 production plants in the Philippines, manufacturing a range of carbonated and non-carbonated beverages such as juices, iced teas, sports drinks and energy drinks. Its brands include the anchor Pepsi and its derivatives, 7Up, Mountain Dew, Gatorade, Lipton, Tropicana, Propel and Sting.

The Malaysia-controlled Guoco Group acquired the local bottling unit from the Lorenzo family in 1997 and sold a minority 32.9 percent stake to US-based parent PepsiCo. The Guoco Group still holds 40.3 percent; The Nassim Fund, 21.6 percent; and Orion Land, 4.5 percent.

In fiscal year ending June 2007, Pepsi sold 120.4 million eight-ounce case equivalent of carbonated beverages and 12.1 million eight-ounce case equivalent of non-carbonated drinks.

In the same fiscal year, Pepsi’s profit rose 15 percent to P1 billion from P868 million the past year, on net sales of nearly P13 billion.