THE local unit of Taiwan’s New Kinpo Group said it remains on track with its expansion plans in the Philippines despite the postponement of its P6.77-billion initial public offering (IPO).
Cal-Comp Technology (Philippines), Inc. said in a statement issued Wednesday that it had decided to defer its IPO temporarily due to current market conditions and investor sentiment.
“We believe that deferring our IPO will better realize the value of our company for our shareholders and for the investing public. We will resume our IPO at an appropriate time in the future depending on overall market conditions,” the company said.
The local stock market has been tracking a sharp descent in previous days due to several conditions such as the ongoing trade war between the United States and China, the weaker peso, and fears of rising inflation. The onslaught of typhoon Ompong — international name Mangkhut — during the weekend further dampened sentiment as investors feared the inflationary effects of its damages in Northern Luzon.
The Philippine Stock Exchange (PSE) index has once again entered bear territory after closing Wednesday’s trading at 7,221.23, or 20% lower than its peak of 9,078 last January.
Cal-Comp Technology filed a registration statement at the Securities and Exchange Commission (SEC) for the sale of 378.07 million shares at a maximum price of P17 each last July. The corporate regulator approved the filing earlier this month, passing it on to the PSE for the final go signal.
Proceeds of the IPO would have been used to build two new facilities in Batangas, adding 48,000 square meters of manufacturing space for the company. The company also planned to enter into land leases with the First Philippine Industrial Park, Inc. for a property spanning 300,000 sq.m.
The funds to be raised would have also allowed the company to acquire new assembly equipment, upgrade existing facilities, and pour in more investments for research and development.
“Despite this deferment, our growth and expansion plans in Philippines remain on track. We will continue to invest in the Philippines, bringing more business to country, hiring and training more local talents, and introducing our innovative products to the Philippine market,” Cal-Comp Technology said.
Fellow IPO hopeful Del Monte Philippines, Inc. also deferred its stock market debut last June, citing volatile market conditions. The food manufacturer had already secured clearance from the SEC and PSE when it decided to postpone its P13.5-billion fundraising activity.
Meanwhile, San Miguel Food and Beverage, Inc.’s P142-billion follow-on offering is still on the table for the fourth quarter of this year. This will be the largest capital raising exercise in the PSE’s history should the transaction push through. — Arra B. Francia