In doing good business, profitability and survival are not the only and sole solid goals. Brown taipan Manuel Villar Jr., has proven once again that he’s deserving of the top position in the country’s list of wealthiest businessmen. Villar recently listed another company in the stock market to trigger faster growth and reach to its potential market and shareholders. Here’s Everything you need to know about AllDay IPO.
According to Securities on Exchange and Commission (SEC), AllDay Marts Inc., the Villar-owned retail company and supermarket operator filed its application for an initial public offering to raise up to P6 billion last August 13, 2021 amid the popularity of the ‘essentials’ business due to recurring lockdowns.
According to SEC and its IPO application, the primary offering involves up to 6.85 billion common shares valued at an indicative price of P0.80 apiece, with an over-allotment option of up to 685.7 million common shares should the demand increase and strengthen in the coming months.
This proposed equity deal will bring 30 percent of AllDay’s stocks to public hands, which can increase to 33 percent assuming that the overallotment option is exercised.
Similar to other companies’ strategies, the company will use proceeds from the IPO for debt repayment from several banks carrying interest rates of between 5 percent to 8.08 percent amounting to Php4.1 billion. The sum generated was used primarily to fund its past store footprint multiplication.
“We believe that pursuing this strategy will increase the overall shareholder value of the company as this will decrease our financing cost by as much as P264.4 million per annum.” said the Villar group-owned and led company.
A portion of the proceeds will also be used to pump funds as initial working capital (or capital expenditures) for its ongoing store network expansion. The company intends to hit 45 stores by 2022 and 100 branches by the end of 2026.
“Any balance of the net proceeds will allow us to partly fund our store network expansion. We believe, however, that we will still be able to access debt funding from our various relationship banks as the need arises in the medium-term,” the Villar-led retail company said.
Lending banks are Union Bank of the Philippines, which accounts for P1.67 billion; Philippine
Business Bank, P900.4 million; Maybank Philippines Inc., P149.9 million; Security Bank Corp., P200 million; RCBC Capital Corp., P600 million; Bank of China (Hong Kong) Limited, P380 million; and Cathay United Bank Co. Ltd., P200 million.
“As part of our store network expansion, we plan to have up to a total of 45 stores by 2022 and 100 stores by the end of 2026. The viability of a potential location for a new store is based on a number of factors, including the demographics of the area, the size of the population, its income levels, local government and local infrastructure and support, and, in particular, proximity to residential developments,” the supermarket operator company added.
The new stores planned up to the end of 2022 will be funded mostly from the net proceeds from the sale of primary shares. On the other hand, at least 70 percent of the base offering will be pitched to certain qualified buyers and other retail investors in the Philippines.
To specify, out of the P1.19 billion of the net proceeds intended for store network expansion, some P710.9 million will be allotted for capital expenditures while P479.8 million will be set aside as initial working capital.
AllDay IPO Date
AllDay plans to run the offering from Oct. 15 to 25 and list on the main board of the Philippine Stock Exchange on Nov. 3 under the trading symbol “ALLDY” should it get the nod of its regulatory agencies.
In addition, the company views this as a cost-cutting move to improve business implications in terms of volume per store and overall net revenue.
“As all of our stores are leased, we will not incur any expenses for construction. We do not have plans to acquire land,” the retail company said.
In terms of revenue growth and profitability, AllDay said it recorded a profit of P179.6 million in the first semester, 59 percent higher than the previous year’s P114 million. Sales for the period rose 19 percent to P4.49 billion from last year’s P3.75 billion, the company said.
However, despite the woes brought by the COVID-19 pandemic, the sales reached P4.5 billion during the first half of the year, resulting in a net income of P179.6 million.
“We believe this is irrefutable proof of concept for our elevated supermarket experience. Our consistent year on year growth since 2017 shows that our world-class stores, brought even closer to established communities, resonate with the upgraded tastes and purchasing power of the Filipino people at large,” said Villar, chairman of AllValue, AllDay’s parent company.
AllValue president Camille Villar said AllDay’s growth is a product of the company’s propensity to innovate and remain on the cutting edge of retail consumer trends.
“Through our elevated in-store experience, comprehensive product offering, a special focus on international goods, and now, a strong push for digital transformation towards e-commerce, we are confident in our ability to post even better results moving forward,” she said.
Allday Marts Inc. mandated PNB Capital and Investment Corporation as the sole issue manager for the offer. BDO Capital, Investment Corporation, and China Bank Capital Corp, along with PNB Capital, will serve as joint lead underwriters and joint bookrunners.
Other Villar companies listed at the stock exchange are real estate companies Vista Land & Lifescapes Inc., Golden MV Holdings, Vista Malls, and All Home. There are also plans to list a real estate investment trust.
This year, Forbes has shown a report estimating Villar’s net worth valued at $5.6 billion, slightly higher than the $5.5 billion last year. Villar ranked 286th in the world.
The 70-year-old Villar, who once aspired to be the country’s president, is currently the chairman of various retail stores, real estate, and property development companies such as Starmalls and Vista Land & Lifescapes, respectively. He also owns Bria Homes, a housing and condominium developer.
Written by Carla Abigail Tambalo