Synergy Grid slashes FOO offer price by 32%

MANILA, Philippines — Synergy Grid & Development Phils. Inc. slashed by 32% the maximum offer price for its upcoming share sale that is meant to raise the company’s public ownership level and bankroll the capital expenditures of the country’s grid operator.

Updated filing documents released Monday on the stock exchange showed Synergy Grid’s new price for its follow-on offering (FOO) is now set between P12 and P17 per share, cheaper than the previous offer price range of P15-P25 apiece.

Assuming Synergy Grid would sell the shares using the new maximum offer price, the company is expected to rake in P17.4 billion in net proceeds, lower than P25.77 billion that would be raised if the company stuck to its original plan.

Luis Limlingan, head of sales at local brokerage Regina Capital, said “it’s hard to say at this point” why Synergy Grid trimmed its offer price.

Under the company’s plan, Synergy Grid would sell 1.1 billion common stocks to the public to raise cash and purchase non-voting shares in National Grid Corporation of the Philippines (NGCP), the operator of the country’s power transmission grid where Synergy Grid has 60% stake.

In turn, NGCP will use the money from Synergy Grid to bankroll its capital expenditures, which is estimated at P38 billion for next year.

The offer also includes an option to sell an additional 101 million common shares held by shareholders Henry Sy Jr. and Robert Coyiuto Jr. Net proceeds from the sale of over-allotment option shares — estimated at P1.66 billion — will all go to Sy and Coyiuto and will not benefit Synergy Grid.

As it is, the company would embark in a new offering to meet regulatory requirements. This was after a share swap between Sy, Coyiuto and Synergy Grid caused the company’s public ownership level to crash to 0.26%, which is below the 20% minimum requirement of the Philippine Stock Exchange for backdoor-listed firms. Trading of the company’s shares was suspended as a result.