SL Agritech delays IPO

MANILA, Philippines - Hybrid rice seed producer SL Agritech Corp. may delay its plan to conduct an initial public offering (IPO) to next year amid concerns on events which may affect local market conditions.

“Right now, we feel we are getting stronger every year. We think we could even delay (the IPO) for one more year although, we can practically do it this year,” SL Agritech president Henry Lim Bon Liong told reporters late Tuesday.

He said there are factors which need to be considered in the conduct of an IPO such as events which may have an impact on the market.

He noted that the stand-off between the Philippines and China over Panatag shoal is a concern if the conflict escalates as it will affect not only the two countries’ trade relations but also the stock market.

The stand-off between the two countries started last month as two surveillance ships of China prevented the arrests of Chinese fishermen caught poaching off the shoal by the Philippine Navy.

Lim said he has also been told by financial advisers that if the firm would still want to conduct the IPO this year, preparations should already be made as early as now.

“If ever we do the IPO, we would like to raise at least more than P2 billion,” he added.

SL Agritech would be the third listed agricultural firm should it decide to conduct an IPO.

Agricultural firms listed on the Philippine Stock Exchange are AgriNurture, Inc. and Calata Corp.

SL Agritech said in 2010 that it wanted to sell P1.3 billion worth of shares or equivalent to 26 percent of the company to the public to raise P985.78 million to be used to retire debt and expand operations. The planned sale of shares to the public, however, did not push through.

Lim said earlier the firm would pursue the planned IPO depending on market conditions.

Apart from going public, he said, the firm intends to continue to expand its operations overseas.

SL Agritech ships parental lines of hybrid rice seeds to Indonesia, Bangladesh, and Myanmar.

The parental lines of seeds are being planted in those countries to produce seeds to be sold to farmers there. SL Agritech earns from the payment of royalties for seeds sold to farmers.

Lim said the firm is looking to start exporting seeds to Nigeria.

Apart from increasing its operations in Indonesia, Bangladesh and Myanmar, SL Agritech is also looking to expand its operations in Vietnam where it is currently exporting seeds.

SL Agritech is a subsidiary of the Sterling Paper group of companies. It was formed in 1998, performing research work on hybrid rice.