MANILA, Philippines—Shares of Calapan Ventures Inc., owner of the waterworks system of Calapan City in Oriental Mindoro, traded higher during the company’s stock trading debut on Thursday despite the sluggish market environment.
CVI, which listed shares under the ticker H20, saw a 7.2-percent increase to finish at P2.68 per share, giving the utility company a market capitalization of P405 million.
“I guess this is mainly because the issue size is very small so it’s very easy for punters to push the issue. Basically, there’s speculation of further uptick due to the limited number of shares in the market,” said Asiasec Equities chief strategist Manny Cruz.
CVI, a subsidiary of publicly listed Jolliville Holdings Corp., sold to the public 42.16 million shares at P2.50 per share, bringing to public hands 26 percent of its outstanding capital stock.
The company listed on the PSE’s second board, which is devoted to companies with high growth potentials, a minimum market capitalization of P250 million and one year in operating history. Unicapital Inc. arranged the offering.
The offer generated P105.4 million in gross proceeds and about P95.15 million in net proceeds, which will be used to finance various water projects.
Specifically, P52 million will be used for the expansion of storage facilities, including the construction of one overhead reservoir as well as the installation of transmission and distribution lines from the reservoir to the water system, based on the company’s final prospectus.
The company also plans to invest in zoning works in 26 barangays (villages) such as the installation of district meters and isolation valves. Also included is the cost of massive meter replacement in order to reduce leakages or non-revenue water (NRW) to its target level of 20 percent.
NRW – referring to water lost in its distribution system due to leakage, pilferage and metering errors – has been lessened from 64 percent in 1997 to around 33 percent by 2010.
CVI has an ongoing rehabilitation, expansion and improvement plan for its waterworks system in Calapan City, Oriental Mindoro. This plan seeks to bolster water pressure, improve water quality and increase production to accommodate more households into its network.
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