UnionBank trims size of stock rights offering to P12 billion

MANILA, Philippines — Union Bank of the Philippines has trimmed the size of its planned fund raising activity to up to P12 billion from P20 billion as additional capital requirements could be funded by existing businesses.

Joselito Banaag, general counsel and corporate secretary at UnionBank, said in a disclosure to the Philippine Stock Exchange (PSE) the bank has set a target of up to P12 billion for its stock rights offering (SRO).

Last Oct. 28, the bank’s board of directors approved the capital raising activity of up to P20 billion, which may take in the form of a stock rights offering to all existing shareholders or a private placement, subject to market conditions.

“The bank’s latest balance sheet projections based on its economic outlook shows that any additional capital requirements beyond P12 billion can be internally generated from existing businesses,” Banaag said.

He said the market price and number of outstanding shares of UnionBank would be adjusted on the ex-rights date.

According to Banaag, proceeds from the fund raising activity would be used to fund the capital infusion of Union Digital Bank and for other general corporate purposes.

Furthermore, the amount to be raised would also finance loan availments by retail, corporate, and commercial customers as well as for other growth opportunities such as investment securities and other assets.

Just last May, the Aboitiz-led bank raised P40 billion through a stock rights offering to partially fund the acquisition of the retail banking business of global banking giant Citigroup Inc. in the Philippines.

Last June, UnionBank raised P11 billion after investors swarmed the first-ever digital peso bond issuance in the Philippines.

The fund raising activity, part of the bank’s P39 billion bond program, was oversubscribed as it originally pegged the size at P1 billion.

“This year, we made significant headways toward our aspiration of becoming a Great Retail Bank,” UnionBank president and CEO Edwin Bautista said earlier.