DEL MONTE Philippines, Inc. (DMPI) has delayed what would have been the country’s first initial public offering this year, citing the current volatility in the local stock market.
In a disclosure to the stock exchange on Thursday, DMPI’s parent firm Del Monte Pacific Ltd. (DMPL) said it would postpone the issuance until market conditions improve.
“Market conditions continue to be volatile and the company has been advised by its bankers and advisors that it would be in the best interest of the company and DMPI to defer the offering until such time when the market conditions improve,” DMPL said.
DMPI had expected to raise up to P13.5 billion in the share sale, with pricing originally set to be announced on Wednesday.
This marked the second time that DMPI has postponed its IPO. The company had initially targeted listing at the Philippine Stock Exchange (PSE) last April, but was prompted to push back its issuance to give way to the stock rights offering of several lenders at the time amounting to around P110 billion.
The Philippine stock market is considered the worst performer in Southeast Asia, as the peso’s weakness and high inflation weighed on investor sentiment. The benchmark PSE index (PSEi) has plunged back to the 7,500 level after hitting a peak of 9,058 last Jan. 29.
Analysts noted the significant exit of foreign investors from the local market, with net foreign selling already at P48 billion by the end of May, almost reversing the P56-billion net purchases seen last year, according to a weekly market report by Eagle Equities, Inc. Research Head Christopher John Mangun.
The local unit of the canned fruit manufacturer had already secured approval from the Securities and Exchange Commission and the PSE to proceed with the offering last May 24 and May 31, respectively.
The planned share sale consisted of up to 587.44 million common shares priced at a maximum of P29.88 each, allowing the company to raise up to P17.5 billion in fresh capital.
DMPI had scheduled to offer the shares to the public from June 8 to 18, with listing at the main board of the stock exchange by June 25. The company would have been the first to take its shares public this year, ahead of property developer D.M. Wenceslao & Associates, Inc. (DMWAI).
DMWAI is set to price its IPO on Friday, with the offer period set to run from June 18 to 22. The company, which is developing Aseana City in Manila, looks to list its shares at the PSE by June 29.
DMPI is an indirect subsidiary of DMPL through Del Monte Pacific Resources Ltd.’s Central American Resources, Inc. DMPI sells canned pineapple juice and juice drinks, canned pineapple and tropical mixed fruits, tomato sauce, spaghetti sauce and tomato ketchup. — Arra B. Francia