By Ashley Erika O. Jose, Reporter
GLOBE TELECOM, INC. said the planned initial public offering (IPO) of its electronic wallet platform GCash is not a priority for now as the company concentrates on expansion.
“As of now, GCash or Mynt has not submitted any application to list; what the team is doing is really to prepare for its next phase of growth. Whether that includes a listing is going to be a possibility at any point in time,” Globe President and Chief Executive Officer Carl Raymond R. Cruz told BusinessWorld Editor-in-Chief Cathy Rose A. Garcia as part of BusinessWorld One-on-One’s online interview series.
Globe Fintech Innovations, Inc. (Mynt), the operator of GCash, is a partnership among Globe, Ayala Corp., and Ant International, a digital payment, digitization, and financial technology provider.
For now, GCash’s priority is to bring more users to its platform as part of its goal to accelerate financial inclusion, Mr. Cruz said.
“The good thing is GCash doesn’t need capital. It generates its own capital. So the need for an IPO technically, while it’s there, is not really high on that agenda right now,” he said.
“I agree that it’s not a priority because GCash is cashflow positive and doesn’t really need to raise capital to sustain its operations,” COL Financial Group, Inc. Chief Equity Strategist April Lynn Lee-Tan said in a Viber message.
She said GCash is most likely awaiting positive signals from the market for better conditions to secure a favorable valuation.
For Cristina S. Ulang, head of research at First Metro Investment Corp., market sentiment is bearish at the moment and could be the reason why GCash is delaying its IPO.
In April, Globe said the much-anticipated IPO of GCash would likely proceed later this year or in 2026 amid market uncertainties.
Earlier, the Securities and Exchange Commission (SEC) said it was considering a tiered approach to the minimum public float requirement for companies seeking to list on the stock exchange.
The SEC has also said it would allow a lower public float for large IPOs. Under this relief, companies planning to list on the Philippine Stock Exchange with an IPO exceeding P5 billion may seek approval to offer less than the required 20% public float.
However, the SEC clarified that it remains firm on the 20% minimum float requirement, noting that companies availing themselves of this relief can initially offer 15%, provided they commit to a follow-on offering or private placements within three years.
The SEC’s move came after Globe said it would seek regulatory relief from the 20% minimum public ownership (MPO) rule for the planned GCash IPO.
“They (GCash) have enough capital so no rush. It would be nice for them to list but the market is still not doing well,” BDO Capital & Investment Corp. President Eduardo V. Francisco said.
For this year, the Philippine Stock Exchange (PSE) expects six IPOs. So far, only one company has made its stock market debut — Cebu-based fuel retailer and distributor Top Line Business Development Corp. in April.
SEC Chairman Francisco Ed. Lim said the corporate regulator is working double time to encourage more companies to list.
“We are trying to simplify the listing rules. We are trying to interpret it more liberally to encourage more listing,” he told BusinessWorld.
GCash has 94 million registered users across at least 16 markets including the US, the United Kingdom, the United Arab Emirates, Australia, Canada, Germany, Hong Kong, Italy, Japan, Saudi Arabia, Kuwait, Qatar, Singapore, South Korea, Spain, and Taiwan.
For the first half, Globe’s attributable net income dropped 14.5% to P12.44 billion from P14.55 billion a year earlier after lower revenues for the six months ending June.
Globe’s gross revenues for the January-to-June period declined by 2.68% to P87.23 billion from P89.63 billion last year.
The decline in net income was tempered by Globe’s affiliates, particularly Mynt, which sustained strong performance for the first half. Globe said GCash helped mitigate a further drop in consolidated net income.
Mynt’s equity earnings for the six months ended June surged 78% to P3.8 billion from P2.1 billion a year ago. This accounted for 26% of Globe’s pre-tax net income, more than double its 12% contribution in the previous year.
At the local bourse on Monday, Globe shares rose by 1.22% or P19 to close at P1,574 apiece.
