Unionbank prices rights offer at P30.57 apiece
Union Bank of the Philippines has priced its upcoming stock rights offering (SRO) at P30.57 per share, allowing the Aboitiz-led bank to inject as much as P10 billion into its digital arm.
In a stock exchange filing on Friday, UnionBank said existing shareholders would be offered 327.12 million shares from May 16 to May 24. The listing date is tentatively set for May 31.
A company offers stock rights typically to raise additional capital. It allows existing shareholders to purchase more shares at a discounted price and earn more dividends.
For UnionBank shareholders, they may purchase a share for every 9.1382 shares they already own.
UnionBank’s shares on Friday slipped by 2.76 percent to P38.70 each, signaling negative sentiments from the market.
Its share price has been declining in the past weeks after reporting lower earnings, according to Francis Ferdinand Subido, senior research analyst at AP Securities Inc. This resulted in the lower SRO price, he noted.
“With the additional equity infusion from the SRO, there is the risk that [UnionBank’s] return on equity will be further diluted versus its peer banks,” Subido said in a Viber message.
In the January to March period, UnionBank, the country’s ninth largest bank, saw its earnings dip by 41 percent to P2 billion on high costs of migrating the Citi brand into its systems.
In July last year, UnionBank announced it had planned to inject P900 million in fresh capital into UnionDigital to bankroll the latter’s expansion plans, including the introduction of digital loans. INQ
