35th Anniversary - 1978-2013
35th Year Anniversary
1978-2013
 

 
 

 
 

 
 

 
 
 

PhilNaRe Opens Public Offering
April 27, 2007

The National Reinsurance of the Philippines (PhilNaRe) will join the Big Board of the Philippine Stock Exchange (PSE) today. The country's only national reinsurance firm has raised some P 2.8 billion from the exercise to be used to increase the Company’s capital.

Approximately P 9 billion after this listing, PhilNaRe's increase in capital will correspondingly enable the company to increase its capacity to accept and retain premiums.  More importantly, it will enable PhilNaRe to achieve an acceptable reinsurance rating as a security in the Asian region, which is an essential prerequisite to gaining entry into the Asian reinsurance markets.

It was only last year when the major powerhouse organizations in local industry inked a merger that would lead to three major institutional stockholders. The state pension fund Government Service Insurance System (GSIS), the Yuchengco-owned Universal Malayan and the Ayala-owned BPI group all hold stakes of 24% each in PhilNaRe.

PhilNaRe President and Chief Executive Officer Wilfrido Bantayan said the decision to go public affirms the company’s commitment to true nation-building and local market maturity.

“Aside from PhilNaRe’s plans in expanding regionally because of greater capacity to retain premiums through this IPO, the company would like to be the champion for reeducating the local investing market in the benefits of insurance industry products as investment products, particularly life insurance.” Mr. Bantayan said.

“As they grow, we grow. When they succeed, we succeed.” he added. As national reinsurer, PhilNaRe retains a portion of the reinsurance business from the local insurance industry. This captured market is made sure by Presidential Decree 1270, which states that PhilNaRe is to retain a minimum of ten percent of the local reinsurance business.

Another key success factor to this listing is the support that PhilNaRe received from the local small investor market (LSI). The LSI’s accounted for 89% of the total subscriber base but only 9% of the total shares that were offered. This led to the PhilNaRe to exercise the over-allotment option or Green Shoe option. This exercise involved the issuance of 103,902,600 additional common shares.

The International Finance Company (IFC), the investment arm of the World Bank, was interested in supporting the IPO of PhilNaRe with a private placement of $15 million. Since the talks were put on hold because of the IPO, the negotiations may be rejuvenated for a later time when PhilNaRe is ready to take on a strategic investor.

 
 
 
     
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