OceanaGold IPO priced at P13.33

MANILA, Philippines — OceanaGold Philippines Inc. was the first company to brave the stock market this year, slashing its initial public offering (IPO) price by 23% and closing at P6 billion amid a backdrop of inflation and global uncertainty. equity transactions.

The Philippine Stock Exchange (PSE) said on Wednesday that OceanaGold has priced the issuance of 456 million secondary shares at 13.33 pesos per share, below the initial maximum target price of 17.28 pesos per share. This also reduces the size of the public offering from the initial P7.9 billion.

The pricing, which values ​​100% of the company's shares (the first mining company to go public since 2012), is approximately P30 billion.

According to OceanaGold's April 15 preliminary prospectus, the offer period runs from April 29 to May 6.

Read: OceanaGold Philippines gets SEC approval for P7.9-B IPO

The company said factors considered in determining the offer price included its ability to generate earnings and cash flow, the level of demand from institutional investors and overall market conditions.

April Lynn Tan, chief equity strategist at COL Financial Group, told the Inquirer that current market conditions are “not great,” resulting in low valuations for many stocks.

“For companies planning to go public, it's difficult to get high valuations,” she added.

Investors are “interested”

Astro del Castillo, managing director of First Grade Holdings, said OceanaGold's lower IPO price was “not surprising.”

“It’s hard to find gold in the PSE today. Stock market conditions are challenging today given the red flags, [such as] US interest rates, peso weakness, inflation and geopolitics,” he said in a Viber message.

Still, Del Castillo said OceanaGold remains “interesting” for investors.

“The company's IPO price may look as valuable as silver, but the chances of it being worth gold may not be that far away,” he added.

Read: OceanaGold Philippines budgets $7 million for new mine Didipio

OceanaGold is a local subsidiary of Toronto-listed OceanaGold Corp. and the operator of the Didipio gold and copper mine in Nueva Vizcaya.

The Didipio mine is an underground and open-pit mine with an expected mine life of 10 years, protected by a 25-year Financial and Technical Assistance Agreement (FTAA) that was renewed in July 2021.

For the PSE, at least six IPO transactions worth up to P40 billion are expected in 2024.

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Last year, delistings outnumbered initial public offerings as four companies exited local exchanges, wiping out P300 billion in market value. In 2023, three companies were listed with a total market capitalization of P13.1 billion.

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