SMC’s Bank of Commerce plans P4-billion IPO
San Miguel Corp. (SMC) affiliate Bank of Commerce is eyeing to raise as much as P4.03 billion through an initial public offering (IPO) by March next year.
In an e-mail on Thursday, the Securities and Exchange Commission (SEC) said it received the bank’s registration statement for its IPO on Dec. 7.
The bank is eyeing to offer 280,602,800 common shares for up to P12.50 apiece, with an overallotment option of up to 42,090,400 common shares.
According to Bank of Commerce’s preliminary prospectus dated Nov. 26, net proceeds from the primary offer will be used for lending activities and capital expenditures for its information technology (IT) projects, while the balance will be used for the acquisition of investment securities.
“The issuer will not receive any of the proceeds from the sale of the option shares by the selling shareholders,” the bank said.
Bank of Commerce may net up to P3.34 billion from the sale of primary shares.
The bank said it plans to use P1.8 billion to expand its loan portfolio along with its strategy to generate higher interest income. It said the loans “will be primarily to corporate borrowers as well as some housing and auto loans.”
Meanwhile, the net proceeds that will be allocated for its IT projects will be rolled out from 2022 to 2026.
Its P522-million “ATM Refresh” project entails replacing 273 existing automated teller machines (ATM) machines with 144 cash recycling machines and 129 ATMs will be updated with newer versions. The bank also plans to buy additional 15 cash recycling machines and 15 cash deposit machines for offsite locations.
The full implementation of the ATM Refresh project is slated for 2023, while the bank is expected to make annual payments of P104.4 million until 2026.
Meanwhile, it plans to use P400 million to replace its existing Silverlake Integrated Banking Solution (SIBS) core banking system. The system is projected to “go live” by 2023 with annual payments expected until 2026.
“As part of its liquidity management, the Bank plans to place a portion of the proceeds in Philippine government securities to both generate interest revenue as well as to satisfy the High-Quality Liquid Asset requirements of the BSP (Bangko Sentral ng Pilipinas) under Basel III,” Bank of Commerce said.
Should the net proceeds from the sale of the primary offer be lower than the expected amount, the bank said it still plans to allocate its net proceeds accordingly.
Bank of Commerce aims to conduct an offer period for trading participants and retail investors from March 7 to 18, with a tentative listing at the main board of the Philippine Stock Exchange on March 25.
The bank assigned BDO Capital & Investment Corp., China Bank Capital Corp., Philippine Commercial Capital, Inc., and PNB Capital Investment Corp. as the offer’s joint issue managers, joint lead underwriters, and joint bookrunners. — Keren Concepcion G. Valmonte
