repower energy [REDC 5.05, down 1.2%; 4% avgVol] [link] that disclosed China bank [CHIB 30.90, down 0.2%; 972% avgVol] exercised its over-allotment option to purchase 10 million REDC shares, representing only 33.3% of the 30 million over-allotment shares available to CHIB under its option. This partial exercise of the option will result in REDC having a public free float of 32.31%, instead of the 35.38% that REDC expected if the option was exercised in full. REDC completed the stabilization phase with no stabilization action required.
MB conclusion: This has been a successful IPO for REDC so far. The company sold the offering and raised a number of primary funds to fund the expansion and sold part of its over-allotment option, raising 50 million pesetas for REDC’s parent company (the selling shareholder of the secondary shares). All of this was achieved without falling below the offer price of P5.00/share and in a challenging market phase that even experienced professional investors have to offer CTS Global [CTS 0.74 unch; 30% avgVol] sit on the edge of government papers. REDC has successfully completed the tutorial and the company will be forced to navigate the next stages without the support of a stabilization fund to mitigate the impact of external forces or internal failures. In the past two years, PSE IPOs have only had a 1-year survival rate (where survival = trading above the IPO offer price) of 15% (SPNEC and CREIT). Good luck, young entry. Good luck to all the REDC hodlers out there!
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