By Ashley Erika O. Jose, Reporter
CEBU-BASED Aznar Shipping Corp.’s planned initial public offering (IPO) could face a cautious market amid domestic and global economic uncertainties, although its December listing schedule may help if sentiment improves following larger offerings, stock market analysts said.
“The litany of concerns in our domestic economy and the uncertainty in the global economic environment will not be a good backdrop during Aznar’s period of offering,” First Grade Finance, Inc. Managing Director Astro C. del Castillo said in a Viber message on Monday.
Aznar Shipping has filed a registration statement with the Securities and Exchange Commission (SEC) for a P737-million IPO comprising up to one billion primary common shares and an overallotment option of up to 100 million secondary shares.
Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said the planned IPO could broaden the types of companies entering the Philippine stock market amid a thin IPO pipeline.
In a statement over the weekend, Aznar Shipping said the shares have an indicative maximum offer price of P0.67 each, putting the primary offering at up to P670 million.
The secondary shares under the overallotment option could be worth another P67 million if fully exercised, bringing the potential total offer size to P737 million.
Aznar Shipping provides inter-island passenger and cargo transport between the Visayas and Mindanao. It currently operates 10 vessels serving four inter-island routes.
In June, the company said it was planning to add three vessels and exploring new routes across the Visayas as part of its expansion.
The company said proceeds from the IPO would be used to fund fleet and capacity expansion.
“That makes the transaction fundamentally growth-oriented: investors are being asked to fund additional operating capacity rather than primarily provide an exit for existing shareholders,” Mr. Arce said.
Aznar Shipping is targeting a Dec. 18 listing on the Small, Medium and Emerging Board of the Philippine Stock Exchange (PSE) under the proposed trading symbol “ALX.”
“Investors will always welcome a company who wants to be listed in the exchange. However, given the present market conditions, the fundraising activity by Aznar will be quite challenging,” Mr. Del Castillo said.
Two IPOs are expected in October: Mynt, Inc., the operator of e-wallet platform GCash, and VITRO REIT, Inc.
“The two IPOs expected this October will also siphon much liquidity from the market… If trading in the markets remains anemic until the end of the year and oil prices remain costly, then December may not be a good Christmas for the company,” Mr. Del Castillo said, noting that the shipping industry is exposed to oil price volatility.
“The planned December timing is more interesting. A year-end listing can benefit from improved sentiment if larger offerings preceding it perform well and restore investor confidence in the IPO market,” Mr. Arce said, adding that Aznar Shipping could benefit from positive market momentum if larger IPOs proceed this year.
He said Aznar Shipping could also benefit from limited listed exposure to logistics and inter-island shipping following the delisting of 2GO Group, Inc.
“That regional dimension could be attractive because the company’s growth proposition is tied specifically to increasing economic activity, tourism and trade within the Visayas rather than simply replicating businesses already heavily represented on the PSE,” he said.
“Overall, I see Aznar Shipping’s IPO as a constructive test of whether the Philippine market can support smaller, growth-oriented regional companies alongside marquee offerings,” Mr. Arce said.
