Uncertain market conditions prompted Datem, Inc. to shelve a planned initial public offering (IPO), the construction firm said on Monday.
Datem, which last week announced that a December listing at the Philippine Stock Exchange (PSE) would not push through, indicated that it would have realized lower gains.
“Further to our earlier letter regarding the deferment of the IPO of Datem, Inc., and in response to queries received from various parties and media correspondents as to the reason behind the deferment, we would like to clarify that the company’s decision to defer and adjust the timetable for the IPO is primarily due to the uncertainty in the capital markets prevailing at the time of pricing,” Datem said in a disclosure.
“The company recognizes that pursuing the transaction under such an abstruse investment environment may not be beneficial to the company, the investing public, and the Philippine capital markets as a whole,” it added.
Datem, which last week said it was also reserving the right to revise the offering’s terms, added that it was working with underwriters to determine a new IPO timetable and would update the PSE and the Securities and Exchange Commission as soon as possible.
BPI Capital and FMIC are the joint issue coordinators, lead underwriters and bookrunners for the offer.
The firm wanted to raise up to P4.65 billion through the sale of 329.046 million shares — 286.127 million for the base offer and 42.919 million more in case of oversubscription – priced at a maximum of P14.15 per share.
The offer period was to run from November 24 to December 1, with a listing at the PSE Main Board targeted for December 8. Datem would have ended up with 15 percent public ownership and a market capitalization of P26.99 billion.
The Quezon City-based contractor firm has almost 30 ongoing projects with big developers such as Megaworld Corp., Shang Properties Inc., Greenfields Development Corp., Federal Land Inc., and Robinsons Land Corp.
The shelving of Datem’s IPO will reduce the PSE’s expected listings for 2015 to five.
Just two firms have so far gone public this year: Crown Asia Chemicals Corp. and SBS Philippines Corp. A third, Metro Retail Stores Group Inc., is scheduled to list today but the firm was forced to cut its offer price and subsequently lowered expected proceeds to P4.037 billion from P6.17 billion.
Scheduled to follow Metro Retail is construction giant DM Wenceslao and Associates, Inc, which is seeking to raise P18.88 billion—the biggest IPO for this year—to sustain its expansion plans and land acquisitions through 2020.
The offer period is scheduled to start today up to December 1, with the listing set for December 8.
Also set to debut next month is Italpinas Development Corp., which wants to raise P243 million. The offer period runs this week and a listing at the PSE’s Small, Medium and Emerging Board is scheduled on December 7.
Pipes and plastics maker Crown Asia raised P222.78 million and chemical trader SBS Philippines took in P1.15 billion earlier in the year, ahead of market volatility triggered by concerns over a US Federal Reserve rate hike and a slowing global economy.