BPI sets pre-emptive rights offer at P67.50

MANILA, Philippines - Ayala-led Bank of the Philippine Islands (BPI) has set the price of its rights offer at P67.50 the company disclosed to the Philippine Stock Exchange (PSE).

BPI said the 370.37 million shares to be offered will be made available starting Jan. 20 until. The offering period will end on Jan. 30.

Shareholders of record as of Jan. 16 are entitled to a ratio of one rights share for every 9.602 existing common shares held.

The estimated P25 billion to be raised through the rights offering would be used to finance the bank’s expansion program and to further strengthen its capital base.

BPI chief financial officer Joseph Albert Gotuaco said portion of the proceeds would also be used to broaden and increase its retail channels.

Other funds that would be raised would also be utilized for investment towards enhancing its corporate banking and investment banking capabilities.

Gotuaco said BPI is also readying funds for the possible acquisition of other banks.

“(The proceeds would also) “ensure the financial flexibility (of the bank) to consider acquisition opportunities if and when they arise,” he said.

In addition, the offer would also strengthen the bank’s capital base to preemptively address any potential additional capital requirements under the new global Basel 3 regime.

As of end September 2013, BPI’s market capitalization was P343 billion with a capital adequacy ratio (CAR) of 16.1 percent and a Tier 1 CAR of 14.7 percent.

Ayala Corp., BPI’s major shareholder, has indicated its support for the rights issue.

The bank has appointed BPI Capital Corp. as a sole global coordinator, bookrunner and sole domestic underwriter for the rights issue.

In the first nine months of 2013, BPI registered earnings of P15.8 billion, up 19 percent from the P13.2 billion in the same period 2012.

This nine-month income resulted to a return on equity of 20.5 percent and a return on assets of 2.2 percent.

Total revenues grew 12 percent due to the improvement in net interest income brought about by the 16 percent expansion in average asset base.