A FAVORABLE outlook for renewable energy (RE) bodes well for Alternergy Holdings Corp., analysts said, as the wind farm developer debuts on the stock exchange on Friday amid investor worries over events abroad.
Alternergy is holding its initial public offering (IPO) of shares and expects to raise about P1.62 billion to fund ongoing and planned clean energy projects.
“With the current market sentiment, I do not think that the IPO might outperform or be an outlier. Investors are still in a defensive strategy due to the report coming from the [US Federal Reserve],” Mercantile Securities Corp. Head Trader Jeff Radley C. See said in a Viber message.
AP Securities, Inc. Equity Research Analyst Carlos Angelo O. Temporal said Alternergy could potentially experience a positive swing during its market debut.
He cited “the surprising oversubscription of the IPO amid the muted macro backdrop, its attractive growth narrative in [the] renewable energy space, and its relatively small offer size.”
Mr. Temporal also said that any potential downturn from Alternergy’s shares might be tempered by its stabilization fund.
Meanwhile, COL Financial Group, Inc. First Vice-President April Lynn C. Lee-Tan said in a Viber message: “Although [the] outlook for renewables is favorable, the focus is on the US banking crisis. No one is focused on renewable plays right now.”
Ms. Lee-Tan added that the long-term performance of Alternergy shares is likely to depend on its operation, “which is still a forward number.”
According to the company’s final prospectus, its IPO covers the sale of up to 1.15 billion primary common shares with an over-allotment option of up to 115 million shares.
The shares will be sold at a final offer price of P1.28 apiece, with the company expecting gross proceeds of up to P1.62 billion for the sale of firm shares, assuming the over-allotment option was fully exercised.
Mercantile Securities’ Mr. See said that decreasing the IPO price from P1.48 to P1.28 “makes the stock look cheaper but in terms of valuation it is expensive.”
The final offer price is lower compared with the P1.48 per share it initially stated, from which it expected up to P1.87 billion in proceeds under its preliminary prospectus in February.
“The company plans to allocate P564 million of the proceeds from the IPO towards funding for the construction and development of projects,” Alternergy said.
The projects include the construction and development of the Solana solar project in Bataan and the Lamut hydropower project in Ifugao. They will corner 36.6% of the P1.54-billion net proceeds.
Around 32% or P522.19 million will be used as payment for acquiring shares in Kirahon Solar Energy Corp.
Additionally, P155 million will be spent on the predevelopment expenses of future projects.
Alternergy tapped Investment & Capital Corp. of the Philippines as sole issue coordinator, and as joint issue manager and lead underwriter together with BDO Capital & Investment Corp. Unicapital, Inc. was assigned as the offering’s co-lead underwriter.
The shares will be listed on the main board of the Philippine Stock Exchange with the ticker symbol ALTER. Alternergy expects a post-IPO market capitalization of P5.04 billion. — Adrian H. Halili