PLDT defers VITRO REIT IPO to 2027, citing market conditions and rising interest rates

PLDT Inc. has postponed the initial public offering of its data centre arm VITRO REIT to 2027, blaming current market conditions and rising interest rates. The company had earlier targeted an Oct 12 listing on the Philippine Stock Exchange. VITRO aims to raise up to P24.2 billion through the offer o

PLDT Inc. has deferred the planned initial public offering (IPO) of its data centre arm VITRO REIT, Inc. to 2027, citing current market conditions and rising interest rates. In a disclosure dated 5 Oct, the Pangilinan-led telecommunications company said VITRO REIT had decided to postpone the offering but would continue working with the Securities and Exchange Commission and the Philippine Stock Exchange (PSE) to complete the applicable requirements.

“PLDT remains committed to the proposed VITRO IPO as an important part of the Group’s asset monetization and deleveraging plans, while supporting expansion of the REIT (real estate investment trust) portfolio and continued growth of the Group’s data center business,” the company said. VITRO is the data centre arm of ePLDT, Inc. within the PLDT group. The company operates 11 data centres nationwide with a combined capacity of nearly 100 megawatts.

The company had earlier targeted an 12 Oct listing on the PSE. VITRO is seeking to raise up to P24.2 billion through the offer of 1.91 billion secondary common shares, with an overallotment option of 286.96 million shares, at an offer price of up to P11 apiece. Proceeds from the offer will be used by ePLDT to reduce debt while complying with REIT regulations and its approved reinvestment plan.

VITRO has appointed UBS AG, Singapore Branch and BPI Capital Corp. as lead international underwriter and domestic lead underwriter, respectively. They will also serve as joint global coordinators and joint bookrunners for the proposed offer.

Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said deferring VITRO’s IPO to 2027 was “the more prudent move rather than forcing the transaction into an unfavorable market.” “REITs are particularly sensitive to interest rates because investors compare their dividend yields with yields available from government bonds and other fixed-income instruments,” he told BusinessWorld. “When risk-free yields rise, investors generally demand a higher yield from REITs as well, which can translate into a lower IPO valuation,” he added.