Citicore Energy REIT Corp. (“CREIT” or the “Company”) received its Permit to Sell (PTS) from the Philippine Securities and Exchange Commission (SEC) on Feb 2 for its initial public offering (IPO) of 2,181,819,000 common shares with an over-allotment option of up to 327,273,000 common shares at an offer price of P2.55 per share.
Earlier, the Company mentioned that the Sponsor, Citicore Renewable Energy Corp., (CREC), has decided to increase its stake in the Company, from an initial 57.4% to 66%, net of the over-allotment option, by rightsizing its offer size. The move reflects the Sponsor’s vote of confidence in the Company’s long-term sustainable growth and pursuit of a net zero carbon future for all.
At a resulting public float of around 38.3% post IPO, assuming the full exercise of the over-allotment option, CREIT will be above the required public ownership of 33.33% based on the Revised REIT Implementing Rules and Regulations (IRR).
CREIT, the country’s first energy REIT, was also priced more reasonably to reach a wider investor base to serve as the Company’s long-term partners.
“The Company believes that a more affordable pricing will allow a broader set of investors to participate in CREIT’s value proposition, especially since these individuals and institutions will be our long-term partners. What we want to offer in CREIT is a sustainable investment in various aspects – economical (for the investor), social (for the communities), and environmental (towards a zero-carbon future),” said Oliver Tan, CREIT President and CEO.
Post-offer, CREIT plans to implement a dividend payout of at least 95% of its distributable income for the preceding year (subject to availability of unrestricted retained earnings and compliance with applicable laws), which is a premium over the required dividend payout of at least 90% based on the REIT IRR.
At an IPO price of P2.55/share, CREIT’s implied dividend yields based on projected 2022 and 2023 earnings are 7.0% and 7.4%, respectively, based on the Final REIT Plan. CREIT shares will be offered to the public from February 2-8, 2022 and scheduled for listing on February 17, 2022.
“We would also like to express our most sincere gratitude to our regulators, the SEC and the Philippine Stock Exchange as well as our underwriting syndicate, for their continued guidance and assistance to ensure that this landmark offering comes to fruition,” Tan added.
The underwriting syndicate is led by Unicapital, Inc., BDO Capital and Investment Corp., PNB Capital and Investment Corp., Investment & Capital Corporation of the Philippines (ICCP), CLSA Limited and CIMB Investment Bank Bhd (International Bookrunners).