Site International launches $3.9m raising to progress Philippines development

Training services company Site Group International (ASX: SIT) has launched an entitlement offer to raise $3.9 million in part for the development of its 38.4% interest in acreage at Clark in the Philippines.

The land was independently valued at around A$26 million in 2022, based on its current low-use zoning, however Site is working on increasing this value through a rezoning for commercial development or sale.

Clark is currently attracting major investment in a drive to diversify the Philippine’s infrastructure away from the capital Manila.

Under the terms of the non-renounceable pro-rata offer, Site’s eligible shareholders will be able to subscribe for one new share for every share held at an issue price of $0.003 per share.

If fully subscribed, the offer will raise $3.9 million on the issue of approximately 1.3 billion shares.

This offer follows a placement of $750,000 to institutional investors in early March 2023 which was supported by EGP Capital, Lucerne Investment Partners and Altor Capital among others.

Proceeds will be used to develop the Clark site, support ongoing working capital requirements needed to pursue Site’s global revenue pipeline, pay down shareholder loans and cover the costs of the offer.

Reach Markets has been appointed lead manager of the offer.

Clark Freeport Zone

Site owns a 38.4% stake in a 30-hectare leasehold in the Clark Freeport Zone, which is co-funded by the Filipino government and the Asian Development Bank with the goal of creating a prosperous region that decentralises the country’s economic activity away from Manila.

The zone has attracted some of the biggest hotel brand names in the world (including Marriott, Hilton and Swissotel) and at the end of 2021, the area was home to a 121,000 strong workforce, 3,641 hotel rooms, 126 dining facilities and 45 tourist attractions.

Training development area

Around 10% of the 30 hectares is designated as a training development area and includes a $104 million turbine owned by US multinational GE, as well as an OceanaGold underground mine simulation environment.

Site is currently running a six-month program in the area involving the assessment and deployment of 400 qualified scaffolders and riggers for the Snowy River Scheme.

The company said the real value of the land will be in its rezoning from education and training to commercial development, after which it will sell up or partner with a local developer.

Blue chip clients

Site provides training courses to blue chip clients in the resources, construction and industrial sectors worldwide.

Customers including ExxonMobil, Saudi Aramco, GE and Shell have operations in developing nations where local populations often lack the appropriate skill sets.

Site has partnered with these companies as one of few industry players with the know-how, experience and relationships to fast-track local workforces into productive employees operating to the highest safety standards.

Exceeding milestones

Following a collapse in revenues from over $31 million in the 2019 financial year to around $7 million in 2022 and a share price drop of more than 95%, Site is now focused on exceeding its former milestones.

These include developing and upskilling workers in Saudi Arabia in partnership with oil giant Saudi Aramco under the Kingdom’s Vision 2030 which seeks to diversify its sources of income beyond oil and develop its public service sectors.

The company has forecast revenues of more than $31 million in 2025 while the share price remains near all-time lows.