Alterra Capital sets March 20 date for share sale

ALTERRA Capital Partners, Inc. has set a March 20 date for the start of its sale of 500 million common shares to raise up to P3.4 billion in fresh capital.In its preliminary prospectus, the company that is on its way to being renamed Philab Holdings Corp. said it has set the offer period from 9:00 a.m. on March 20 up to 12:00 noon on March 24.

The company intends to use the proceeds from the offering “for investment in healthcare companies in the region, expansion of product line, repayment of existing debt, and general corporate purposes.”

Alterra expects the new shares to be listed on the Philippine Stock Exchange on March 31. The shares are priced at a range of P3.25 to P6.75 each for gross proceeds of between P1.625 billion and P3.375 billion.

Trading of shares that are not subject to a lock-up period is expected to start on the same date. Philippine Commercial Capital, Inc. (PCCI) is the sole issue manager, sole bookrunner and sole underwriter for the offering. The common shares will be issued out of the unissued authorized capital stock of the company.

About 20% of the shares on sale are being offered to PSE trading participants, with the remaining 80% are to be distributed by PCCI to qualified buyers and to the general public.

Alterra expects net proceeds from the offering at P1.53 billion and P3.19 billion after deducting underwriting fees, commissions and expenses.

The company plans to spend up to P1.671 billion or 52% as investment in healthcare companies.

“[Alterra] intends to participate in fund raising activities of several offshore companies that is [sic] actively engaged in the business of healthcare,” the company said in its prospectus, adding that it has initially identified certain investments that will benefit its subsidiary.

Philab Holdings conducts its business through subsidiary Philab Industries, Inc.

Alterra acquired 93.48% of the outstanding capital stock of Philab Industries after the takeover on Oct. 11 of 67% of the issued and outstanding voting stock of the listed company by Genomics, Inc. and Philab Industries President Hector Thomas A. Navasero from Conrado Rafael C. Alcantara, Alfonso S. Anggala and Star Alliance Securities Corp.

The company has yet to sign a definitive agreement for its proposed investment in healthcare companies, but hopes to conclude that sometime between the second and fourth quarters of this year.

Alterra also plans to use 24% of the net proceeds or up to P74 million to repay existing debt in the second quarter of 2017. The loans were incurred for restructuring activities after the acquisition of Philab, and for working capital.

Based on an offer price of P6.75 per share, the company plans to spend P500 million, or 16% of the net, to expand its product line. The remaining 8% or P250 million is earmarked for general corporate expenses.

The company said the amount and timing of the disbursement will depend on various factors, including “changing market conditions or new information regarding the cost or feasibility of the projects.” Should it be unable to use the fresh funds for their intended purpose, Alterra plans to invest in interest-bearing short-term demand deposits as well as money market instruments.

Source: Business World Online