BDO Capital and Investment Corp. is quitting as underwriter and issue manager of Globe Asiatique Realty Holdings Corp.’s (GA) proposed initial share sale, forcing the property developer to abandon its current plans to go public.
GA said it will seek funding from private sources in lieu of an initial public offering (IPO), which would have financed the completion of several ongoing projects.
The announcement also comes in the wake of allegations and published reports saying GA committed fraud.
“In light of this development, GA has to respectfully request the withdrawal of our approval by the exchange due to the unexpected resignation of our issue manager and lead underwriter,” GA chief financial officer and executive vice president Dexter Lee said in a letter to the bourse dated September 6.
GA said it “was not aware” of BDO Capital’s intention to resign until it received a letter from the latter.
“As the exchange would no doubt appreciate, the resignation of BDO Capital will cause obvious insurmountable difficulties to our ability to launch a successful initial public offering especially at this stage of the process,” GA added in its letter.
The property developer announced on September 1 that it plans to postpone its IPO, set in the middle of this month, due to the “poor” global markets.
In a text message yesterday, BDO Capital president Eduardo Francisco explained that the decision to resign came as GA’s IPO was postponed and the developer was already considering withdrawing its IPO approval.
Market analysts have already concluded that the IPO would “likely fail” given the negative publicity surrounding the company.
Among the allegations, GA supposedly falsified documents to obtain loans for low-cost housing projects in Pampanga province amounting to as much as P7 billion over a period of two years.
It was also claimed that the property developer used the documents in registering ineligible borrowers with the government-run Home Development Mutual Fund or Pag-Ibig Fund.
GA said it still “offers an extremely attractive investment for the public and hopes to one day be able to realized its goal of launching a successful initial public offering to the exchange.”
At present, the property developer said it is in continuing discussion with potential private investors.
Both the Philippine Stock Exchange (PSE) and Securities and Exchange Commission (SEC) have already asked GA to answer these allegations.
SEC Commissioner Juanita Cueto said the corporate regulator has already withheld the issuance of GA’s permit to sell shares to the public, pending the completion of its investigation.
GA would have been the first company to hold an IPO this year.
Based on its prospectus, approved by both the PSE and SEC, GA planned to sell 170.46 million primary and secondary shares at a price ranging from P6.50 to P10 apiece.
The offer would raise up to P1.70 billion for GA and its shareholders. Also included was an overallotment option for 168.7 million common shares, which would have added as much as P1.68 billion to the IPO.
Globe Asiatique said earlier that proceeds from the IPO will be used to fund projects such as its GA Sky Suites and Corporate Tower, located in Edsa corner Quezon Avenue in Quezon City, and housing developments in the province.
