North Star shelves IPO plans due to 'market volatility'
MANILA, Philippines — North Star Meat Merchants deferred its plan to go public, taking on a cautious stance due to unfavourable market conditions and quickening inflation.
"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," North Star, the meat supplier of the SM Group's grocery chain, said in a disclosure to the stock exchange on Tuesday.
The pork and meat vendor said it made the decision after a consultation with BDO Capital & Investment Corporation and China Bank Capital Corp, their underwriters and bookrunners for this offering.
As it is, North Star is the latest company to postpone their planned fundraising activities in the local stock market amid inflation fears and volatile trading. But Luis Limlingan, head of sales at Regina Capital, said other firms would likely proceed with their public offerings as they remain unfaze by inflation.
"Some companies may not be as sensitive to inflation as other so we cannot generalize for them," Limlingan said in a Viber message.
North Star indicated in its prospectus that proceeds from its deferred IPO would be used to fund the expansion of its cold chain infrastructure. They were looking to raise P4.5 billion from their maiden share sale of 360 million primary shares, 32 million secondary shares, and an over-allotment option of 58 million secondary shares at P10 apiece.
Michael Enriquez, chief investment officer at Sun Life Investment Management and Trust Corp., agreed with Limlingan. "I believe there are about 10 companies planning to have an IPO this year," he said in a Viber message.
"I think majority will push through with their plans given that they may already need the proceeds to help them with their expansion plans," Enriquez added.
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