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Listed firms trumpet benefits of going public

MANILA, Philippines — Some of the country’s listed companies trumpeted the benefits of going public, saying that while regulatory requirements are stringent, the advantages outweigh the disadvantages.

In a recent talk organized by the Shareholders Association of the Philippines, officials from listed Wilcon Depot, D.M. Wenceslao, D&L Industries Inc. and SM Investments Corp. said going public is a good way of preserving the legacy by having a good succession plan, raising funds for expansion and providing a seal of good housekeeping.

D&L president Alvin D. Lao said “being a listed company provided the company more options.”

He cited various benefits of doing an initial public offering – having another metric to measure performance, estate planning, financial discipline, keeping the legacy of the founder and providing additional competitive edge.

For D&L alone, he said the IPO provided the company access to capital, new assets, a mechanism for rewarding real ownership, and pressure to grow. The company raised P4.6 billion from the IPO in 2012.

Wilcon Depot president and CEO Lorraine Belo-Cincochan, for her part, said the IPO provided the company funds for expansion and allowed it to continue the legacy of her father, Wilcon founder and chairman William Belo.

Wilcon made its IPO debut last year, raising P7 billion in fresh capital.

At the same time, Cincochan highlighted rigorous regulatory requirements, saying that being a public company is like being in a glasshouse where every move of the company is under public scrutiny.

But she said going public forced them to leave their comfort zones, and become more responsible as a company.

D&L’s Lao said owners lose their privacy when a company goes public. There’s also pressure on growth, ownership dilution, and trading restrictions.

Despite the advantages, Lao said they would gladly do it again.

SMIC chairman Jose Sio said that going public enabled the SM Group to grow big from just one department store.

Doing the IPO, together with the grand vision of SM founder Henry Sy to go large-scale, as well as the hard work of the people behind it, made SMIC the giant conglomerate that it is now, Sio said.

D.M. Wenceslao, the newly listed integrated property developer, meanwhile successfully raised P8.1 billion from its IPO despite volatile market conditions.

Delfin Angelo C. Wenceslao, CEO of D.M.Wenceslao, said they are extremely satisfied that they have successfully completed the offering.

He said the company is now ready to jumpstart projects including a mix of commercial and residential projects in Aseana City.

“These pipeline projects will continue to increase our recurring revenue streams and sustain our long term growth,” Wenceslao said.

Being a public company is a step in the right direction especially for businesses which want to last through generations.