D.M. Wenceslao puts IPO on back burner
D.M. WENCESLAO & Associates, Inc. is pushing back its initial public offering (IPO) further, after resolving to take a “conservative” route in pursuing projects amid the uncertainties surrounding the business process outsourcing (BPO) sector.
“We’re in a wait and see right now, considering all of the issues in the BPO [sector] because, as you know, 90% of the IPO story was to build BPO buildings,” D.M. Wenceslao Chief Executive Officer Delfin Angelo C. Wenceslao said in a Nov. 21 interview.
“If you talk to them (BPO locators), you could see that suddenly there’s this cloud. So we’re just waiting for that cloud to go away,” the company official noted.
D.M. Wenceslao had planned to debut on the Philippine Stock Exchange with a P12.3-billion IPO as early as 2015. The company eventually allowed its registration with the Securities and Exchange Commission to lapse due to unfavorable market conditions.
The company had earmarked proceeds of the offering for the ongoing development of its 60-hectare Aseana City in Parañaque. For this year alone, it will have spent P2.5 billion for the first phase of the project.
The pronouncements of US president-elect Donald J. Trump about restricting the outsourcing of jobs to emerging markets like the Philippines have added to the concerns of D.M. Wenceslao.
“If you remember, in the prospectus, 90% of the fund will be used to build BPO buildings. If you talk to a lot of them right now, some of them are on a wait-andsee for new entrants and expansion,” Mr. Wenceslao said.
“So, we’re still doing our pipeline after what we said in the prospectus, but it’s just more conservative. Before, we would have built everything at once, but now, we’re going to wait and see.”
D.M. Wenceslao is constructing its third office building slated for completion within the first semester of 2017. It looks to break ground for another tower, currently in the pre- planning stage, within the same six-month period.
“We’re still implementing the development pipeline, as if the IPO will push through, because we were able to get financing. We’re using that financing. The IPO money is for five to seven years. So we got funding for a good one to three years,” Mr. Wenceslao noted.
Asked if undertaking an IPO remains necessary, Mr. Wenceslao said: “From right now, it’s not. But if you talk to us probably talk to us late next year, then we would see if we finish all of our funding for the projects.”
“I think for the next two years, we’re okay. Suddenly, if we see a strong drive again in the BPO industry, we’ll reevaluate,” the executive added. —