A. Brown raises P720 million

MANILA, Philippines - A. Brown Co. Inc. has successfully raised P720 million in new funds from a top-up placement of shares to select institutional investors and qualified buyers.

In a disclosure to the Philippine Stock Exchange, A. Brown said it placed out 250 million shares (including 173.6 million held in treasury) at P2.89 apiece via a top-up offering arranged by COL Financial Private Clients Group.

Under this scheme, A. Brown’s controlling shareholder lent out secondary shares for sale and then subscribed to the same number of shares at the same price. The shares were crossed on the stock exchange Monday.

“We are delighted with the investor support for A. Brown. This capital-raising will build on the initial investments that we have made in our power generation, palm oil plantation and mining businesses as we continue to work to capture the Philippines’ growth opportunities in the areas where we have the experience, network and technical expertise to succeed,” said A. Brown chairman Walter W. Brown.

Bulk of the new funds will be used to finance the company’s stake in Palm Concepcion Power Corp., which is building a 135 megawatt clean coal-fired power plant in Iloilo at a cost of P12.5 billion. The project, in partnership with the Ayala family’s AC Energy Holdings Inc., is on track to break ground by the fourth quarter and for operation by 2015 – in time for the anticipated tight power supply situation in the Visayas grid.

While the Visayas power grid has stable supply of electricity, it will need additional power plants in the next five years to cope with the growing demand for power from consumers.

Meanwhile, A. Brown’s legacy real estate business continues to make its mark in its niche markets in Cagayan de Oro City and parts of Northern Mindanao. In the past 17 years, it has developed and sold P5.7 billion worth of projects, covering 238 hectares of land. A steady income earner for the group, pocket projects will continue to be developed in its niche areas, as the company has a landbank sufficient for development in the next eight years.

Apart from power generation, A. Brown manages a 2,200-hectare palm plantation in Mindanao, with its own milling operations and an oil processing plant scheduled to be operational in the first quarter of 2013.

The company is planning to build up its plantation area to 10,000 hectares by 2020.

Studies have shown that while domestic consumption of palm oil continues to improve as the economy grows, the Philippines had to import the bulk of its requirements as domestic supply cannot cope with demand.