Robinsons Land to sell more shares due to strong demand
An article published in the
Philippine Star, October 15, 2006
By Zinnia B. Dela Peņa
Buoyed by the strong demand for its stocks,
Robinsons Land Corp. (RLC) is exercising its over-allotment or greenshoe
option of an additional 121.67 million secondary shares to be sold to the
public.
In a disclosure to the Philippine Stock Exchange, RLC said shareholders JG
Summit Holdings Inc., Universal Robina Corp. and JG Summit Capital Services
Corp. have agreed to sell 2.45 million RLC common shares, 103.44 million
shares, and 15.78 million shares, respectively.
An over-allotment option is a provision contained in an underwriting
agreement which gives the underwriter the right to sell to investors more
shares than originally planned by the issuer. This would normally be done if
the demand for an issue proves higher than expected.
A greenshoe option can provide additional price stability to a security
issue, since the underwriter has the ability to increase supply and smooth
out price fluctuations if demand surges too high.
RLC last month offered a total of 811.14 million shares in both the local
and international markets at P12 each, raising about $223 million in
proceeds.
Shares of RLC closed at P13 per share Friday, up 8.3 percent from the firm's
offer price.
RLC raised around P5 billion from the stock offering which would be used to
partly fund capital expenditures for fiscal year 2007, amounting to P7.03
billion.
With the additional listing of shares, RLC's public float has increased to
40 percent.
The successful relisting of RLC shares was also attributed to the real
estate boom and sound business climate.
RLC has earmarked P15 billion in capital expenditures over the next two
years. About 40 percent of that amount will be channeled to the development
of new shopping malls, 30 percent in office buildings and residential
projects, and the balance for landbanking and hotel projects.