MANILA, Philippines – The country’s largest retailer of computers and IT equipment slashed its proposed initial public offering (IPO) by 70 percent to 1.65 billion pesos as risk aversion flared amid contagion fears among banks in the United States.
Upson International Corp., which operates mall electronics stores like Octagon Computer Superstore and Gadget King, slashed the offering price for its IPO by 56 percent to 2.40 pesos a share from 5.40 pesos each, a regulatory filing showed.
It also reduced the number of offering shares by 30 percent, notably removing a large chunk of the “secondary stocks” sold by its major shareholder and company chairman, Lawrence Lee, while downsizing the primary offering, which was intended to fund expansion.
Upson, which was founded by entrepreneurs Ricardo Lee and William Lim when personal computers became an accessible consumer product in the 1990s, previously said the offer period for its IPO will run from March 21 to March 27 this year.
It plans to make its trading debut on the Philippine Stock Exchange (PSE) under the stock symbol “UPSON” on April 16 this year.
The company was originally scheduled to go public on April 3 last year. It was among the IPOs that were delayed in 2022 due to volatile market conditions.
A market analyst, who asked not to be identified, said the price cut was likely due to lower-than-expected demand for the supply and relatively cheap valuations for other retail-focused companies on the PSE.
The analyst said that as an established company, Upson is already viewed as a mature player, so “growth is not that exciting.”
The listing also comes at a volatile time as the PSE Index gave back gains for the year after a sharp rally in January.
In the filing, Upson said it was selling 625 million primary common shares, raising a gross amount of 1.5 billion pesos for its expansion and new store openings.
It earlier planned to raise up to 1.9 billion pesos from primary sales to open up to 250 stores by 2027, doubling its current network.
As part of the revised offering, Upson will also sell up to 62.5 million secondary common shares owned by Lawrence Lee.
Data from the independent research center Center for Research and Communication showed that Upson was the country’s largest consumer electronics retailer in 2020 in terms of store count and revenue.
The company started out as a distributor of Logitech and Canon products before the 1997 Asian financial crisis forced it to revamp its business model and enter the retail segment.
Its stores now have a nationwide presence and are located in the country’s top shopping malls.
CONTINUE READING:
PSE Approves P5.4-B Upson IPO
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