SOME local investors are concerned that prevailing volatility in the market might impact against the initial share sale of Cebu Air Inc., the country’s second largest flag carrier.

Market players have inquired about the effects the subprime issue and the slowdown in the US economy might have on the initial public offering (IPO), said Jose Pacifico Marcelo, executive vice president of First Metro Investment Corp. (FMIC), who spoke to reporters on the sidelines of the Cebu Air’s domestic roadshow, or investors’ briefing.

“They like the company although they have raised concerns about the market,” Marcelo said. FMIC is a lead underwriter hired by Cebu Air.

A subsidiary of the Gokongwei-controlled JG Summit Holdings Inc., Cebu Air is selling up to 135.45 million common shares, of which 72.025 million are primary and 63.43 million are secondary held shares.

Seventy percent of the offer will be sold abroad and 30 percent to local investors. The offer price range is up to P95 per share, which, some market pundits consider expensive.

Asked if the underwriters will consider lowering the offer price to agree with current market movements, Marcelo said, “In terms of pricing, the company would be sensitive to market feedback that’s why we are conducting a bookbuilding process.”

He was quick to emphasize, though, that amid market pressures, Cebu Air is a type of stock that relies on sound domestic consumption and strong OFW remittances.

Cebu Air, owner and operator of Cebu Pacific Airline, is targeting to raise net proceeds of P6.6 billion from the sale of new shares, assuming that the offer price is determined at P95 per share. The money will be used to buy new airplanes.

The offer price will be set on January 26, while listing and trading of shares are on February 8.

SOME local investors are concerned that prevailing volatility in the market might impact against the initial share sale of Cebu Air Inc., the country’s second largest flag carrier.

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