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CEBU Air
Inc., owner and operator of budget airliner Cebu
Pacific, has deferred an initial public offering (IPO)
planned for February citing extreme volatility in global
markets.
Activities in the run up to the listing and trading of
its shares have also been postponed—that includes an
international road show where the company would have
pitched its viability to foreign investors.
When the
actual IPO would take place remains uncertain. “We will
apply a wait and see attitude. In an abnormal market
like this, it is very difficult to reflect the true
price of a stock,” said executive vice president Jose
Pacifico Marcelo in an interview with BusinessMirror.
He added
that Cebu Air would have to give corporate regulators a
revised prospectus before it resumes the plan to go
public.
Late
Wednesday, the company told the stock exchange it has
deferred the IPO. “The company will also not continue
the international road show. Despite positive feedback
regarding the company from international and domestic
investors during the management road show, the timing
and execution of the IPO has been overshadowed by global
economic concerns,” it said in a filing with the
exchange.
The
company was originally scheduled to set the offering
price on January 26 and be ready for the listing and
trading of shares on February 8.
“Cebu
Pacific’s expansion plans are not at risk as a result of
a delay to the listing. The company has every intention
of returning to the public markets once market
conditions permit,” the company added in the filing.
Marcelo
said Cebu Air has a strong cash flow to support its
growth, including the purchase of additional aircrafts.
Cebu Pacific is the nation’s second-largest airliner
after flag carrier Philippine Airlines.
The
deferment of the initial share sale of Cebu Air would
not in any way hurt its expansion program, said First
Metro Investment Corp., one of Cebu Air’s lead domestic
underwriters.
“Even
without the P6.6-billion net proceeds it expects to
generate from the IPO, everything will still be
manageable. Their earnings remain strong. I think they
have leeway to postpone [the IPO],” Marcelo said.
The
amount of money Cebu Air was suppose to have earned from
the IPO was reached on the assumption that 72.025
million primary shares on offer would sell at a maximum
price of P95 apiece. Cebu Air, a subsidiary of JG Summit
Holdings Inc.—the holding firm controlled by the
Gokongwei family—was selling up to 135.45 million common
shares via the IPO, of which 72.025 million are new
shares and 63.43 million are secondary stocks held by
shareholders.
Seventy
percent of the total offer would have been sold abroad
and 30 percent to local investors.
From
January to September 2007, the company’s revenues rose
61.1 percent to P10.89 billion, from P6.76 billion a
year earlier, brought about by an in the number of
passengers. |
