North Star aborts IPO due to ‘market volatility’

North Star Meat Merchants Inc. has deferred its P4.5-billion initial public offering (IPO) originally scheduled for this month, citing market volatility brought about by elevated consumer prices.

The fresh meat supplier made the decision after consulting its joint lead underwriters and joint bookrunners BDO Capital & Investment Corp. and China Bank Capital Corp.

“While reception to the company and its plans has been positive, the company was constrained to defer the IPO due to increased market volatility amidst inflationary concerns,” it said in a disclosure to the bourse on Tuesday.

Its shelved IPO consisted of up to 392 million common shares with an overallotment option of up to 58 million secondary common shares with an offer price of P10.

The company filed its registration statement with the Securities and Exchange Commission on March 21 and received its approval on May 23. On May 26, the Philippine Stock Exchange approved its listing application.

Adjusted timetable

“The company intends to proceed with its expansion plans albeit with an adjusted timetable and funding source. The company continues to believe in its growth prospects and hopes to be able to tap the capital markets in the future,” North Star said.

According to its prospectus, the proceeds of the fund raising activity were earmarked for cold chain infrastructure expansion and increase in working capital, among others.

The company has three cold chain facilities with a combined capacity of about 8.1 million kilograms, serving 360 meat concessions and over 1,250 stores and outlets across the country.

In 2021, North Star grew its total sales by more than 50 percent to P9.28 billion; profits, meanwhile, rose by 155.56 percent to P610.5 million year-on-year.

—Tyrone Jasper C. Piad INQ