6 hours ago
1
Top Line [TOP] [link] notified the exchange that it would price its upcoming IPO at P0.31/share, which is an 18% discount from the P0.38/share revised price, and a 60% discount from the P0.78/share original price. While no updated prospectus has been made available as of this writing, a source connected with the company indicated that the reduction in proceeds would only impact the “working capital” and “general corporate purposes” line items in the Use of Proceeds section. The build-out of the service stations is untouched. In a statement, the company said: “The final offer price takes into account current market conditions while still ensuring that Top Line can pursue its strategic initiatives, including establishing new fuel stations and expanding its logistics capabilities with additional fuel trucks and tankers with its net proceeds. We are also very pleased with the strong coverage of our books at this offer price and believe it presents significant upside potential for prospective investors.”
MB bottom-line: A lower price will mean more interest, but has all this cutting dropped the price to a place where IPO buyers can hope for a big listing day pop? That’s the part that remains to be seen. There are a lot of people in my circle who are bearish on fuels, but when I talk to them, their complaints quickly devolve into ad hominem attacks against Dennis Uy’s Phoenix [PNX] and vague frustration at Petron [PCOR 2.37, down 0.8%] and its inability to do anything of interest with its industry-leading distribution network of service stations. There’s never a question about the demand for new cars, the pressure on our road network to grow, and the opportunities for companies like TOP to play a significant role in the country's road networking. At least TOP comes to the market with strong leadership (unlike PNX) and less debt than PCOR.
Merkado Barkada is a free daily newsletter on the PSE, investing and business in the Philippines. You can subscribe to the newsletter or follow on Twitter to receive the full daily updates.
