Tubig Pilipinas Holdings, Inc. (TPHI) has filed for a follow-on offering — a share sale by an already-listed company — worth up to P1.82 billion, seeking to finance its water utility expansion and help meet the minimum public ownership requirement that followed its backdoor listing.

In a registration statement filed with the Securities and Exchange Commission (SEC) on Oct. 28, the company proposed to sell up to 15.7 billion primary common shares at an indicative price range of P0.10 to P0.101 apiece. The offering carries an overallotment option of up to 2.355 billion additional shares, which could lift the total offer size to 18.055 billion shares and gross proceeds to approximately P1.82 billion. Because the shares are primary, proceeds go to TPHI itself rather than to selling shareholders, and every tranche bought by the investing public adds to the company's publicly held share count — the mechanism by which the offering is meant to restore the float.

Trading Suspension Behind the Filing

The planned share sale comes after the Philippine Stock Exchange (PSE) suspended trading in TPHI shares on Oct. 19, when the company's public float fell to 10.64%, below the 20% minimum public ownership requirement applicable to its backdoor listing. A suspension bars investors from buying or selling the stock on the exchange until it is lifted, giving the float shortfall direct consequences for existing shareholders.

The decline in public ownership resulted from TPHI's P6.65-billion share-swap transaction involving Tubig Pilipinas Group, Inc. (TPGI). The deal increased the company's outstanding shares to approximately 106.46 billion from 40 billion, while the number of publicly held shares remained unchanged at about 11.33 billion.

Under PSE rules, companies that fail to comply with the minimum public ownership requirement may be suspended from trading for up to six months and automatically delisted if they remain noncompliant after the suspension period. That rule gives the offering a compliance deadline as well: the float must be rebuilt within the suspension window, which can run up to six months from the Oct. 19 halt, or the stock faces automatic delisting.

Use of Proceeds

Based on its preliminary prospectus dated Oct. 20, TPHI plans to use the offering proceeds to finance its Cebu bulk water and Freeport Area of Bataan projects, expand its portfolio of operating water assets, and upgrade existing water supply and distribution systems.

The proceeds will also fund wastewater treatment plants in Mandaue City, Cebu; Coron, Palawan; and San Jose City, Nueva Ecija, as well as the company's operating and working capital requirements. Bulk supply systems, distribution networks, and treatment plants of this kind are capital-intensive, long-duration assets, the type of spending that typically leads water utilities to raise equity for expansion.

The offer period has been scheduled for Jan. 4 to 8, 2027, with the listing of the offer shares on the PSE targeted for Jan. 18, subject to regulatory approvals.

Backdoor Listing Background

The proposed offering follows TPHI's backdoor listing through its acquisition of TPGI, which marked its transition from its former business as Coal Asia Holdings, Inc. to a water utility holding company. The share-swap transaction involved the issuance of 66.46 billion new common shares to Pure Water Corp., Quadwater Corp., and CEF2 A09 B.V. in exchange for their combined 100% ownership of TPGI.

TPGI operates 12 water facilities nationwide and has five projects under construction, according to the company — the asset base the offering proceeds are intended to build out.

Reported by Sheldeen Joy Talavera | Source: BusinessWorld