MANILA, Philippines -- Housing developer Globe Asiatique Realty Holdings Corp. has deferred an initial public offering worth as much as P3.4 billion already approved by the Philippine Stock Exchange for this September, citing "weak global market conditions."
"Following the recent global financial crisis, investors have been expecting the market to return to its normal state. However, as a result of the continued instability of the world market coupled with the lack of insufficient investments, global economic stability is not expected soon," GA Realty chief finance officer and executive vice president Dexter Lee said in a letter to PSE dated Sept. 1.
"People remain wary of investing in emerging markets. Despite the favorable second quarter growth performance of the Philippines, investments in the real estate sector have been very cautious and have been centered around the larger and more well-known players in the market," Lee said.
Prior to this decision to defer the IPO, the property company has drawn unfavorable publicity in relation to its transactions with the state-controlled Home Development Mutual Fund, popularly known as the Pag-IBIG Fund.
In his letter, Lee also cited a securities regulation requiring an updated financial information within 135 days from the time a registration statement becomes effective.
"Pursuant to such requirement, the company is mandated to update its audited financial statements which would take at least a couple of months to complete," Lee said.
Had GA Realty pursued the offering, it would have become the first company to embark on an IPO on the local bourse this year.
GA Realty was planning to offer to the public up to 136.36 million primary shares while controlling shareholders wanted to sell 34.09 million in secondary shares. The underwriter, BDO Capital & Investment Corp., would have had the option to take up 168.7 million additional shares from the company's authorized but unissued capital stock on the same terms as the offered shares, in case of
strong demand.
The IPO was originally scheduled to run from Sept. 15 to 22, after which the property company was to list a total of 1.3 billion common shares.
