Uy firm plans over P1-B share sale

Listed PH Resorts Group Holdings, Inc. of businessman Dennis A. Uy is planning to raise up to P1.13 billion from a follow-on offering of up to 450 million common shares.

In a disclosure to the stock exchange Monday, the leisure and tourism company said its board of directors approved a follow-on offering of up to 300 million common shares with an over-allotment option of up to 150 million common shares.

The shares will be priced at P1 to P2.50 each in favor of the general public.

PH Resorts said the plan is still subject to compliance with regulations and the approval of the Securities and Exchange Commission and the Philippine Stock Exchange, Inc..

PH Resorts is a unit of Mr. Uy’s holding company Udenna Corp. In 2019, the company had planned to do a follow-on offering of up to 2.05 billion common shares which would raise up to P12 billion.

Philstocks Financial, Inc. Research Associate Claire T. Alviar said doing a follow-on offering will affect the valuation of PH Resorts, such that its earnings per share may be diluted because of the increase in outstanding shares.

She added the ongoing coronavirus pandemic makes for a dim outlook for the company, as inessential and leisure activities are still suffering from weak demand and limited operations. “We think that investors’ appetite is not with the leisure businesses for now, not the same as pre-pandemic,” Mr. Alviar said in a text message.

But if its offering becomes successful, PH Resorts may raise funds that would help the completion of some of its projects and other further expansion, Ms. Alviar said.

PH Resorts booked a larger net loss in the first quarter, slumping to P138.27 million from P59.26 million the same period last year, as revenues were slashed 55% to P9.5 million due to the slowdown in tourism.

It said in a regulatory filing it had to temporarily close Donatela Resort & Sanctuary in Bohol because of the coronavirus disease 2019 (COVID-19) pandemic.

Other projects in PH Resorts’ portfolio are the construction of an integrated tourism resort in Cebu and the design of a resort in Clark.

Shares in PH Resorts at the stock exchange went up 35 centavos or 14% to P2.85 each on Monday. — Denise A. Valdez|BusinessWorld

Source: Peso Economics