Balai ni Fruitas readies IPO in volatile equity market

Balai ni Fruitas, a food and beverage firm owned by food kiosk entrepreneur Lester Yu, finalized the pricing for its initial public offering (IPO) scheduled this month amid the current downturn in the local stock market.

In a listing notice on Tuesday, the IPO-bound firm announced the final price of P0.70 per share, which was slightly lower than the firm’s initial price guidance of P0.75 apiece.

“The company agreed to price the issue at P 0.70 per share despite having the book well-covered at the maximum price for the benefit of future public shareholders of BALAI,” said Abigail Buenviaje, senior vice president and head of products and markets at First Metro Investment Corp. (FMIC). Regina Capital Development Corp. head of sales Luis Limlingan said that it was “common for companies to set their IPOs with a bit of a discount relative to the ceiling to attract investors.”

“Also with current market conditions, companies may have to consider that these same investors are on the sidelines, so it’s not necessarily a function of the company itself, but exogenous factors beyond their control,” he added.

The local shares have been in the red territory in the past few trading days before seeing some relief yesterday as investors worry over monetary policy tightening by the Federal Reserves due to surging consumer price index.

Offer period is from June 17 to 23 while the listing is set on June 30. The Philippine Stock Exchange approved this issue last month. Balai is set to sell up to 412.5 million common shares, which include 325 million primary shares by the company, 50 million secondary shares by parent firm Fruitas Holdings Inc. and up to 37.5 million option shares by Fruitas as well.

The company estimates net proceeds of P203.8 million from the offering. These will fund its store network expansion, acquisitions and new concept introductions and setup of commissaries. FMIC is the sole issue manager, bookrunner and underwriter for the transaction.

North Star Meat Merchants Inc. was also set to go public this month but decided to abort the plan, citing market volatility brought about by elevated consumer prices. INQ