San Miguel Corp, the Philippines’ largest company, is seeking to raise a mere P34 billion (about $634 million), less than half of its original target, through a sale of shares in its food unit after pricing the shares at the bottom of an indicative selling range.
In a disclosure to the Philippine Stock Exchange on Thursday, the conglomerate said it will offer 400.94 million common shares in San Miguel Food and Beverage Inc at a price of P85 ($1.6) per share, the low end of the P85-95 price range it set last week.
This excludes an over-allotment option of up to 60.14 million common shares or 15 per cent of the offering.
The move marks yet another trimming of the IPO size by San Miguel Corp. In an amended filing last week, the company said it had slashed by a half the total number of shares it intends to sell to 523 million at a range of P85 to P95 per share due to weakness in the stock market.
The latest disclosure showed that the company further cut the size to 400.94 million, or less than half of its original plan to sell up to 1.02 billion shares for up to P140 ($2.6) per share, a premium of about 75 per cent to the unit’s trading price at the time of the announcement of the plan.
“Payment and delivery of the offer shares shall be on November 12, 2018,” per a company disclosure. San Miguel plans to use proceeds from the share sale to invest in its business, but it did not provide further details.
The original plan could have made the offering, at P142.8 billion ($2.7 billion), the biggest-ever secondary offering in the country, whose market has been considered Southeast Asia’s worst so far this year after falling 15 per cent.
In September, consumer tech firm Cal-Comp Technology (Philippines), a member of the Taiwanese technology conglomerate New Kinpo Group, decided to delay its P6.77 billion ($125 million) IPO due to market conditions.
Cal-Comp added that it will resume its IPO “at an appropriate time in the future” depending on overall market conditions.
In June, the Philippine unit of Campos-led Del Monte Pacific Ltd deferred its listing, citing volatile market conditions. The P17.55 billion (about $333 million) offering would have been the first IPO of the year for PSE.
The local unit of AirAsia Group Bhd, Southeast Asia’s biggest budget airline, also said last month that its IPO could be pushed back to mid-2019 due to high fuel costs and other factors. The company hopes to raise more than $250 million from the listing.
The Philippines, however, is not the only market in Southeast Asia that has seen shelved IPOs so far this year. According to a Bloomberg report, Singapore’s bourse also had its share of delayed listings.