Viva postpones planned maiden offering

BY LOVELY NICA P. LEE, BusinessWorld Reporter MOVIE OUTFIT Viva Communications, Inc. has decided to postpone its initial public offering (IPO) slated for this first quarter due to "unfavorable market sentiments." In a statement to the Philippine Stock Exchange (PSE), the company on Thursday said the decision was reached in consultation with selling shareholder Viva Entertainment, Inc. and issue manager and lead underwriter BDO Capital Investment Corp. "Even as the company’s planned IPO received strong interest during the road shows held in the cities of Davao, Cebu, Bacolod and Batangas, the company’s management is of the opinion that it would not be in the best interest of its present and future stockholders to proceed with the IPO as scheduled," the company said. Viva Communications intended to list on the local bourse this March 5. It is the third company to defer its IPO, following announcements from oil and gas logistics provider Petrolift, Inc. and budget airline operator Cebu Air, Inc. Viva Communications had likewise postponed Friday’s investor briefing in Manila. "The company shall push through with its IPO, hopefully within the first semester of 2008, once market conditions permit and will inform the Securities and Exchange Commission and the Philippine Stock Exchange," Viva added. In a telephone interview, Viva Communications President Vicente R. del Rosario, Jr. said the company hopes to list in April, but added that this would depend on market conditions. "It’s got to be in the right time, hopefully by April but it would still depend on the market," he told BusinessWorld. The local stock market, as well as global financial markets, went on a rollercoaster ride early this year as bleak sentiment emanating from fears that the US economy is faced with recession prevailed. PSE President and Chief Executive Francis Ed. Lim said the bourse respects the decision of the companies to defer their planned public offer, saying it was understandable that they would want to maximize shares’ value. "They believe that the market cannot give them the valuation that they want for their shares because of a bearish market condition. As much as we want companies to list as soon as possible, we have to be fair to them and let’s give them a chance to wait for a better time at which they can get the best value for their shares," he said. "But with the very sound macroeconomic fundamentals of the country, these companies will later on be one of our listed companies in no time," Mr. Lim added. Viva Communications had planned to raise P1.2 billion from the IPO by floating 34.9% of the company’s issued and outstanding stock. The company is selling up to 92.8 million primary shares and 49.9 million secondary shares at a maximum price of P12.93 per share. Early this month, it slashed the low end of the price range to P8.10 from P9.72. Viva Communications will use the proceeds of the shares offer to launch programs on cable channels, acquire foreign movie licenses, digitize and restore its file library, purchase equipment and repay existing loans. For the 10 months ending in October 2007, it posted a net income of P121 million, twice the P60 million it earned for full year 2006. Originally called Viva Productions, Viva Communications was established in 1981. It was renamed last year following its diversification into businesses related to movie production. It operates 10 companies under its wing: Viva Productions, Inc., Viva International Pictures, Viva Television, Pinoy Box Office, Viva Sports, Viva Video, Video City, Viva Music Group, Viva Artist, Viva Concerts and Viva Interactive. - BusinessWorld