San Miguel power unit defers IPO

Business World Online
Posted on November 10, 2011 10:50:24 PM


SMC GLOBAL Power Holdings Corp. has formalized its intention to defer an initial public offering (IPO), company president Alan T. Ortiz said, adding that market volatility had prompted the decision.
Asked to confirm a report that it had notified the Philippine Stock Exchange (PSE) of the IPO’s deferral, Mr. Ortiz replied “yes” in a text message. He declined to be more specific. PSE corroboration was not immediately available.
Underwriter SB Capital Investments Corp., last month said the listing could be pushed back to next year amid current market volatility. Ramon S. Ang, president and CEO of SMC Global Power’s parent firm San Miguel Corp. has also hinted at a deferral.
Mr. Ortiz, in another text message, said: “Our listing will depend on the market. We are currently watching the market.”
An analyst said the firm’s move was “understandable.”
“Most investors are awaiting the public listing of SMC Power because it’s a blue chip firm and people know the management of the company is good,” claimed Astro C. del Castillo, managing director of brokerage firm First Grade Holdings.
“But it’s understandable that they will not list because they are a capital intensive firm and the factors influencing the deferment is beyond the company’s control,” he added.
Mr. Castillo said SMC Global Power would most likely list next year because “the market is going to be different next year.”
The company planned to use net proceeds from the listing, estimated to amount up to P19.2 billion, to partially finance expansion plans. San Miguel had announced a base offer of 290-385 million primary and secondary shares at a maximum price of P71 apiece. This excludes an extra 134.75 million shares under upsize and overallotment options.
The PSE index fell by 1.40% or 61.14 points yesterday to 4,285.06, tracking losses on Wall Street and deepening uncertainty in Greece and Italy, two European countries beset with still-unresolved political and economic woes.
Two firms that staged IPOs this year, Megawide Construction Corp. and Puregold Price Club, Inc., have not been spared from the volatility but their share prices were up as of yesterday from debuts in February and October, respectively.
Other companies such as DMCI Project Developers, Inc. and ACM Landholdings, Inc., meanwhile, have deferred listing plans due to market uncertainties. -- E. N. J. David