CEBU-BASED fuel retailer Top Line Business Development Corp. (Topline) has decided to move the offer period for its planned initial public offering (IPO) to the first quarter (Q1) of 2025 to accommodate institutional investors who need more time to secure internal approvals, its chairman said.
Topline initially scheduled the IPO’s offer period from Nov. 27 to Dec. 3, with a tentative listing date of Dec. 12. The new timetable will be announced following regulatory processes.
The company made the decision a few days after it said it would proceed with the IPO’s original timetable despite the local market slump.
“While we initially planned to proceed with our original offer period, we have received advice from potential investors to adjust our IPO timetable to accommodate their due diligence process,” Topline Chairman, President, and Chief Executive Officer Eugene Erik C. Lim said in an e-mailed statement on Monday.
“This strategic move provides them with the necessary time for their thorough internal review and approval process,” he added.
With this announcement, the Philippine Stock Exchange (PSE) will see only three IPOs for 2024, missing its target of six.
The public listings this year include gold and copper mining company OceanaGold (Philippines), Inc. and renewable energy companies Citicore Renewable Energy Corp. and NexGen Energy Corp.
The PSE previously said it expects to have six IPOs next year, including west zone water concessionaire Maynilad Water Services, Inc.
Meanwhile, Topline said it gathered initial market feedback through institutional buyers.
“We are happy with the reception from our engagement with qualified institutional buyers, reflecting the strong fundamentals and positive prospects for the fuel industry,” Mr. Lim said.
“With the adjusted timetable, we will update our current prospectus to include the company’s year-to-date financial performance in the third quarter, which would demonstrate our consistent growth trajectory,” he added.
Topline’s IPO will consist of 3.68-billion primary shares and an overallotment option of up to 368.31-million secondary shares priced at up to 78 centavos apiece.
The company expects to raise up to P2.75 billion in net proceeds, which will be used to build fuel depots in Mactan, Cebu, and in Bohol that will have a combined storage capacity of 30 million liters.
A portion of the proceeds will also be earmarked for the acquisition of fuel tankers and tank trucks, as well as the construction of ten service stations for its Light Fuels fuel station chain.
“I believe Top Line’s deferment of its IPO is a good move given the current market conditions,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
“Trading activity is not consistently strong as many stay on the sidelines amid lingering headwinds. So propping up investors’ appetite for new issues could be a challenge for the present period,” he added.
Topline has business interests in commercial fuel trading, depot operations, and retail fuel in the Visayas region.
The company has two subsidiaries, namely Topline Logistics and Development Corp., envisioned to engage in the importation, trading, distribution, and marketing of petroleum-based products, and Light Fuels Corp., involved in the fuel retail business. — Revin Mikhael D. Ochave