Sta. Lucia Land cancels P9.9-B FOO due to poor demand
The underwriter/bookbuilder, China Bank Capital Corp, tested the investment market for interest in the issuance, and found that nobody was interested unless Sta. Lucia Land [SLI 2.94 1.38%] provided a substantial discount on the FOO shares.
SLI had provided a price range of between P2.39 and P3.29 per share, but noted that in order to sell the 3 billion common shares in the offer, it would need to discount the offer like a few of the other recent IPOs and issuances that have tried to raise money in this environment. SLI blamed “market conditions'” and “multiple common equity issuances pricing at a significant discount to their respective offer price ranges” on why they decided to “postpone” the offering.
MB BOTTOM-LINE
SLI noted that it would be missing out on using the proceeds to fund its operations and plans, but that conducting a discounted FOO wouldn’t “enhance shareholder value” and just wasn’t “in the best interests of the Company.” Technically, SLI has only “deferred” or delayed its offering, not cancelled or abandoned it, so it’s possible for the company to dust off the application and push forward at some later time; obviously, though, at a time when the company thinks that it can sell those shares to us at a premium.
I don’t blame SLI here; nobody wants to give up equity if they don’t have to, especially on the cheap. I’ve heard rumors that the PSE is something of an approvals bottleneck when it comes to IPOs and equity issuances lately, so perhaps getting SLI off the schedule will help in getting some other IPOs out into the market a little quicker. Figaro Coffee [KAPE] comes to mind, but that’s just pure speculation based on the thought that no sane issuance would ever happen on December 31st. We’ve also got the DITO CME [DITO 6.62 1.19%] SRO, and the Haus Talk [HTI] IPO that has been dead quiet since it was filed with the SEC in September.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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