Upson International Corp., a retailer of personal computers and other gadgets, has filed for an initial public offering (IPO) that could raise P5.42 billion.
The operator of Octagon Computer Superstore, Micro Valley and Gadget King is targeting to list on the Philippine Stock Exchange in July.
According to the registration statement it filed with the Securities and Exchange Commission, the company is offering 888.15 million common shares of firm offer, of which 98.68 million common shares are secondary common shares with a par value of 20 centavos each. Upson is also offering an over-allotment option of another 98.68 common shares.
The company said it is selling the shares at an indicative price of P5.50 apiece.
Upson said it will only raise some P4.34 billion in gross proceeds from the IPO since it will not receive any proceeds from the secondary shares offering and over-allotment option, both worth P1.05 billion.
A chunk of the proceeds, or about P3.55 billion, will be earmarked for store expansion that will be disbursed starting this year through 2026 while P600 million will be used for general corporate purposes.
“To further cement our market leading position, we intend to continue to grow our store network and penetrate cities with high growth potential,” the company said.
It said the company plans to open 50 stores this year in Metro Manila, and key cities in Luzon, Visayas and Mindanao.
It is targeting to open 250 stores, or an additional retail space of 25,000 square meters from 2022 to 2026, via an “aggressive” rollout in the next three years.
“We intend to use majority of the net proceeds from the primary offer for store network expansion which also includes improvements in our supply chain and logistics.”
It also plans to build nine new warehouses and distribution facilities and renovate the current six warehouses.
The new warehouses and distribution facilities will be set up in key areas, such as Manila, Cabanatuan, Dagupan, Naga, Iloilo, Bacolod, General Santos, Zamboanga and Palawan to service store expansion in these regions.
“In addition, we plan to strengthen our logistical capability by adding delivery vehicles. We are looking to add ten-wheeler trucks and delivery vans which we believe will improve our productivity and allow us to have control in the transport of our products,” the company said.
Meanwhile, the P600 million will serve as additional working capital for additional store inventory for the new and existing stores.
“With 27 years in operation, we have built a strong relationship with suppliers, customers, lessors, and regulators. This enables us to gain valuable insights for our store operations including retaining and attracting new customers as well as improving our consumer experience and operational efficiencies throughout our branches and warehouses.”