Capable to fund own expansion: Local retail chain brushes off IPO plans

CEBU, Philippines - Cebu-based retail chain Gaisano Capital remains bullish of its capacity to fund its own expansion program, thus an initial public offering (IPO) remains out of the company’s radar for now.

However, company vice president Edmund Gaisano Jr., said the company may consider it as a long-term strategy depending on the company’s capital requirements in the future.

"It's not yet in the plan in our group to launch an IPO," Gaisano told The FREEMAN in Cebuano in an interview yesterday at the sidelines of the company's contract signing with Taipan Development Inc. and Sustena Inc. for the installation of solar panels in its mall in Pagadian City in Zamboanga del Sur.

The company official said listing in the stock exchange may be considered as long-term strategy in the future but such matter has not been taken up by the company for now.

Although plans of going public was mentioned before, Gaisano said such bold action was, however, not considered.

Currently, the Gaisano Capital chain has over 30 shopping malls around the country, 8 of which are in Cebu.

It can be recalled that in November last year, Metro Retail Stores, another Cebu-based retail chain owned by another Gaisano group, took the bold step to list in the stock market as it has sought to expand further.

Previously, Metro Retail President and CEO Frank Gaisano said that going public is not only a financial objective of the company.

“It’s a strategic transformational process that enables us to improve margins and operating efficiency, protect our market share, and consequently create value for our investors,” he had said.

As of end-June, the retail giant has 49 stores nationwide. 

The company reported earnings of P262 million for the six months of 2016 ended June 30, 24 percent higher than the P211.3 million during the same period a year ago.

Net sales went up by 6.6 percent to P8.34 billion in the second quarter, bringing the six-month tally to P15.91 billion, up 8 percent from a year ago.

The Philippine Stock Exchange (PSE) has been urging companies, particularly the small and medium firms, to finally proceed with plans to list in the local bourse.

There are two more IPOs expected for the rest of 2016, after the maiden offerings of Golden Haven Memorial Park Inc. (P787 million) in June and CEMEX Holdings Philippines Inc. (P25 billion) in July.

The IPOs in the pipeline include the P29.7-billion Pilipinas Shell Petroleum Corp. IPO and the P2.6-billion listing of Audiowav Media Inc.

The year 2016 has seen fewer IPOs compared to the nine to 10 IPOs in the past three years due to the volatility and foreign selling experienced recently. 

At least three companies have also expressed interest to make offers but their IPO applications are still pending: TVI Resource Development (Philippines) Inc. (P1.66 billion); Pointwest Technologies Corp. (P2.21 billion); Green Power Panay Philippines Inc. (222.8 million). (FREEMAN)