MikeLigalig.com

By Leslie D. Venzon

AG Finance Inc. (AGFI), the fourth company to go public this year, will use P150 million fresh capital to expand its loan portfolio for the overseas Filipino workers (OFWs) located in highly developed countries.

“We are still a baby company but we hope to grow steadily at a range of 25 to 50 percent in terms of revenues and income in the next few years. It depends on how we can manage to raise our funds,” said AGFI Chairman Tony O. King in an interview on the sidelines of an investors’ briefing.

King said the microfinancing firm will also tap alternative sources of funding like commercial paper as it is also considering venturing into real estate.

“We hope we can go into properties, condominiums,” he bared.

AGFI President Leila Jorge said the company is focused on its product niches –-the OFW loans and salary loans. The OFW loans comprise 90 percent of the company’s total loan portfolio while the salary loans provided to Philippine companies at only six percent.

“(We will) increase destination countries of OFW loan borrowers and salary loan client companies,” she said. “We want to expand our business into first world countries as much as possible because these are borrowers with high disposable incomes so the market is a bit lucrative.”

Jorge identified some of these countries as the United States, Canada, Australia, New Zealand and Japan. The company’s OFW loan borrowers are also highly concentrated in Southeast Asian countries and the Middle East.

AGFI, which was incorporated in 2001, is one of the major players in microfinance and consumer loans industry now with 4,674 active borrowers. Its total assets stood at P344 million in the first quarter of 2013.

Jorge said they target to expand loan releases between P500 million to P600 million and to grow gross loan receivables and net interest income by 30 to 40 percent.

“In 2013, we are already P280 million (in loan releases). Historically, we grow our income from 40 to 60 percent so your gross loans will follow,” she noted.

Apart from financing its professional and skilled OFW loan portfolio expansion program, AGFI said the net proceeds of the P150-million initial public offering (IPO) will also be used to pay P37 million in existing loans with China Banking Corp.

It intends to sell 68 million common shares for P1.91 to P2.20 a-piece.

Offer period is slated on July 30 to August 5. The listing of the shares on the first board of the PSE will be on August 13.

AG Finance tapped BDO Capital and Investments Corp. as the issue manager and sole underwriter.

“There are already many reservations on small issues. We are not even looking for investors. It is a known company so I expect it to be fully taken up,” said Eduardo Franciso, BDO Capital and Investment Corp. president.

“We believe that given the investment merits of the company, it offers a very good opportunity to the stock market investors,” said BDO Capital Vice President Gabriel Lim.

After AGFI, an operator of upscale beach resort -Discovery World Corp. (DWC)- will also debut in the equities market next month.

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