CHEMICAL trader SBS Philippines Corp. said it has disbursed all of the P1.16 billion proceeds of its initial public offering that it raised in 2015.
The company said about 8 percent of the IPO proceeds was used to finance the purchase and importation of additions to the company’s product portfolio. These include new products and product improvements, as well as funding the organization of a business development unit providing sales and marketing support to develop market share for such new products.
Some 30 percent of the proceeds, meanwhile, was reallocated for investment and capital infusion in the company’s new subsidiary, Lence Holdings Corp., to partly finance the acquisition of a warehouse facility complex in Laguna.
The Sytengco-controlled firm said about 65 percent of the warehouse facility is being considered to be utilized for the warehouse and distribution operations of the company.
Another 8 percent was allocated for facility improvements, reduction of liabilities, working capital, while 2 percent went for equipment and machineries, according to its report.
The company at the same time spent 24.5 percent of the amount to prepay a P282.92-million loan from BDO Unibank Inc., including accrued interests, bearing an interest of 5 percent per annum.
“The company decided to prepay the BDO Loan as it carried a higher interest rate compared to its other loan obligations,” SBS said.
Over the past years, the company has been expanding and diversifying its business.
Late last year, it acquired additional shares of its affiliate Aychester Holdings Corp. and subscribed in a related company, Goldchester Holdings Corp., in line with the diversification plan.
Aychester Holdings approved to increase its authorized capital stock. To maintain the SBS’s shareholding interest of 25 percent, it will have to subscribe to such increase.
On the other hand, the company will increase its holdings Goldchester Holdings, another affiliate through SBS Holdings and Enterprises Corp.
SBS interest in its SBS Holdings has been diluted, which also resulted in an indirect dilution of its shareholdings in Goldchester.
“Thus, the company [SBS] will subscribe to up to 7.75-percent holdings in Goldchester through share subscription, which together with its indirect 9.15-percent shareholdings via SBS Holdings, will help maintain its holding interest,” it said.