Meat trader North Star Meat Merchants Inc. has suspended its P4.5- billion initial public offering (IPO) a few days after it earned the final regulator approval for the share sale.
The meat distributor in various SM supermarkets in the country cited the “increased market volatility” for the IPO deferral.
“Upon receipt of the necessary approvals, a book-building exercise was undertaken. With great regret, the company, in consultation with its joint lead underwriters and joint bookrunners BDO Capital & Investment Corp. and China Bank Capital Corp., has decided to defer its proposed IPO. While reception to the company and its plans has been positive, the company was constrained to defer the IPO due to increased market volatility amidst inflationary concerns,” it said.
The company said it intends to proceed with its expansion plans albeit with an adjusted timetable and funding source. The company added continues to believe in its growth prospects and hopes to be able it to tap the capital markets in the future.
On Wednesday last week, North Star earned the approval of the Philippine Stock Exchange for its IPO, where it plans to sell to the public 450 million common shares, consisting of 360 million primary shares and 32 million secondary shares, and another 58 million secondary shares to cover the greenshoe option at an shares of up to P10 apiece through an initial public offering.
The company was to offer 25 percent of its capitalization post-IPO.
It had planned to hold IPO between June 13 and 17 with listing on the PSE by June 24. The shares were to be listed and traded on the Main Board of the Philippine Stock Exchange.
Based on its timetable, North Star should have had its IPO formally priced by today, June 8.
The company plans to use the proceeds of the primary shares worth P3.5 billion to accelerate the expansion of its end-to-end cold chain infrastructure and operations. It is also looking to expand its financial muscle in order to keep up with the growth of their key retail partners SM Markets and Waltermart Group, and prepare for future potential retail partners.
