Property developer Kepwealth gets regulatory nod to initiate IPO in August

The Philippine Stock Exchange (PSE) and the Securities and Exchange Commission (SEC) gave the maiden share sale of Kepwealth Property Philippines Inc. the green light.

The property developer intends to raise as much as P384.767 million the initial public offering (IPO).

The SEC Commission En Banc approved the planned initial public offering (IPO) on Tuesday, July 23, the commission said on Thursday.

“It may have taken some time before we had our first IPO but I am pleased that KPPI is embarking on its maiden share sale. I hope that this move will encourage other companies that pushed back their IPOs to revisit their plans and consider the stock market as an avenue for capital raising,” PSE president and CEO Ramon S. Monzon said in a separate statement.

“I am also pleased that we have a new listing on the SME Board. I hope this will prompt companies that qualify to list on this board to explore the possibility of raising funds through an IPO,” he said.

Kepwealth plans to offer up to 201,057,609 common shares at up to P5.74 apiece, to be traded on the Small, Medium, and Emerging Board of the local bourse under the trading symbol “KPPI.”

The planned offer period will start at 9:00 a.m. on August 5, 2019, and will end at 12:00 noon on August 9, 2019.

The net proceeds, estimated at P363.027 million, will be used to diversify the company’s assets.

“The company intends to use the net proceeds of the offer to diversify its asset base and partially fund its office leasing portfolio by acquiring a total estimated 3.500 square meters of leasable space within 2019, mostly from the Greater Manila Area—Quezon City. Pasig City and Makati City and Davao City,” the prospectus read.

“The company is looking at specific properties as targets for acquisition and negotiations/preliminary discussions/due diligence are being undertaken,” it added.

Some P245 million will be used to acquire office spaces in Pasig City and Makati City, while another P120 million will be for Davao City.

“The company believes these properties will reduce the concentration risk of its current operations in Cebu City and will create additional recurring revenue streams once these assets are leased out to tenants,” said Kepwealth.

“Upon completion of the acquisitions using the proceeds from the offer, the company expects to have an estimated 18,121 square meters of leasable space,” it added.

Incorporated in September 2005, Kepwealth Property is in the business of investing and developing real property such as office, commercial, agricultural and residential properties, hotels, inns, resorts, apartments, or personal property.
It has tapped BDO Capital and Investment Corp. as the sole issue manager, underwriter, and bookrunner for the IPO. —VDS, GMA News