Barkada Market
October 13, 2022 | 9:00 am
Just before the stock market’s opening bell, it was announced that Enrique Razon decided to postpone the blockbuster of 28 billion pesos Prime infrastructure capital [PFR] IPO by mid-2023 citing “volatile market conditions”.
The deal, as structured in PFR’s filing with the SEC, was intended to consist solely of primary stock in order to maximize the amount of capital that Mr. Razon and PFR could direct to invest in acquisitions in several of PFR’s pillar business units, including energy, water, waste and sustainable fuels.
MB bottom line
As I said on Twitter, not even the titans are immune to the “market condition” gods.
Unless Mr. Razon was keen to raise money for some reason, he will want to wait for a time when investors are willing to accept higher valuations.
It’s not as if Mr. Razon had trouble making acquisitions or failed to build successful, profitable businesses with enough free cash flow to survive without a constant injection of new capital.
Still, it’s disappointing to see PFR pushed out of the IPO schedule, although given all the overblown placeholder deadlines and lack of SEC and PSE approvals, it wasn’t too hard to see it coming.
Perhaps Mr. Razon has been following the MB IPO Tracker and seen how dismal the returns have been and how beaten IPO investors have gotten over the past few months and decided to return to the party at some point in the future when the music is choppy again.
The only question is whether PFR and all the other companies that have delayed IPOs (North Star, Octagon, etc.) will emerge from their hibernation in mid-2023, feeling like hard times are over.
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