Philippine Stock Exchange

Aboitiz-led UnionBank sets price range for its stock rights offering

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Aboitiz-led UnionBank sets price range for its stock rights offering
The universal bank, which acquired Citi's consumer banking over a year ago, hopes to raise P12 billion from the offering

MANILA, Philippines – Aboitiz-led Union Bank of the Philippines (UnionBank) will kick off capital raising at the Philippine Stock Exchange (PSE) this year with its stock rights offering (SRO) from January 16 to 27, 2023.

The universal bank, which listed on the PSE 30 years ago, is set to offer 220.26 million common shares to current shareholders at an offer price range of P54.48 to P58.38 per share. It can opt to extend or terminate the offer period. 

The offer price was determined by computing the volume-weighted average price of UnionBank’s common shares on the PSE for each of the 15 consecutive trading days prior to and including October 28, 2022 with a discount of around 25 to 30%, according to the preliminary offer terms sheet. 

Last Wednesday, December 28, 2022, UnionBank revised its target for its SRO to P12 billion, down from the P20 billion it set in October 2022 due to a better economic outlook for the company. 

It disclosed to the PSE that its latest projections show that it can raise internally its additional capital requirements from its existing business. 

UnionBank said the proceeds from the SRO will be used primarily to infuse capital to its subsidiary, UnionDigital Bank Inc., as well as projected loan availments to its customers, and other business growth opportunities. 

UnionDigital seeks to empower Filipinos by helping build the country’s digital economy. The BSP granted it a Certificate of Authority to operate as a digital bank on July 12, 2022. 

In December 2021, UnionBank acquired Citigroup Inc.’s consumer banking business in the Philippines for P55 billion (around $1.1 billion), edging out larger banks that had drawn bids. 

UnionBank had raised P40 billion also from an SRO to partially finance this acquisition, making it one of the top 3 credit card issuers in terms of usage and spending.

UnionBank also raised another P11 billion in June 2022 from the first digital peso bond issuance in the Philippines, which was part of the commercial bank’s P39 billion bond program. 

UnionBank’s major shareholders are Aboitz Equity Ventures Inc., Insular Life, and Social Security System. – with reports from Ralf Rivas/

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