P19.2-B borrowing.  To paraphrase an old saying, your credit may be good, but the government needs cash. This message was clear to every bidder for the government’s remaining majority stake in PNOC-Energy Development Corp.  (PNOC-EDC) And as the winner in the November 2007 bidding, the Lopez-owned Red Vulcan Holdings Corp. made sure it could pay for what it bought—six billion EDC shares and 7.5 billion EDC preferred shares: it borrowed P29.2 billion of the total acquisition price of P58.5 billion. Of the total borrowing, P19 billion came from the Land Bank of the Philippines and the Development Bank of the Philippines and the balance of P10.2 billion from Banco de Oro Universal Bank. In a filing, Red Vulcan  said, through EDC, as borrower, it (Red Vulcan) “is required to turn over to the lenders all cash dividends declared and paid by PNOC-EDC to Red Vulcan as well as the subscription price or purchase price from any issuance or sale of shares, or  securities by Red Vulcan.” PNOC-EDC can well afford to distribute dividends, either in cash or in stock. As of September 30, 2007, it had retained earnings of P10,365,082,170, up from P6,436,239,694 as of December 31, 2006. It paid its stockholders as of May 15, 2007 P1.485 billion dividend.

                RP out, Singapore still in. If the Philippine government has sold its entire holdings in PNOC-EDC in line with its privatization policy, the Government Investment Corp. (GIC) Pte. Ltd., which is owned by the government of Singapore has not. As of September 30, 2007, GIC owned 746,837,900 EDC shares. GIC used to own 793,286,533 EDC shares, or 5.2886 percent, based on a disclosure posted on July 19, 2007 on the web site of the Philippine Stock Exchange. PCD Nominee Corp. held for  foreigners, including GIC, 8,504,264,768 EDC common shares, or 56.695 percent, and 483,499,232 EDC common shares, or 3.223 percent, for Filipinos. 

n IPO update.  Cebu Air. Inc., the airline company owned by a subsidiary of JG Summit Holdings Inc., is broadening its ownership base to include investors outside the Gokongwei family. In going public, it will list 418.750 million shares on the Philippine Stock Exchange. The shares consist of 72.025 million shares, which will come from Cebu Air’s unissued capital stock and will be sold as primary offering under its initial public offering; 10.225 million shares allotted for its Executive Stock Option Plan and 1.5 million shares for its Employees Stock Option Plan. CP Air Inc., which owns Cebu Air’s present 335 million shares outstanding shares, is selling 63,431,500 shares under secondary offering with option to sell additional 20,318,475 shares if needed to meet demand.

                At “suggested price” of P95 per share, Cebu Air will raise P6,842,375,000, which will result in additional paid-in capital of P6,770,350,000, while its parent company will gross P6,025,992,500 from secondary offering, and P1,930,255,125 from over-allotment shares, or a total of P7,956,247,625. After the IPO, CP Air will be left with 271,568,500 shares, or 60 percent. The authorized capital stock of Cebu Air carries par value of P1 per common shares. In a filing, JG Summit said Cebu Air’s net income in the first nine months in 2007 surged to P2,476,092,000 from P235.639 million in the same period in 2006.  

n Insider’s trade. Andresons Group Inc. bought from December 13 to 28 last year 14.38 million shares in Alliance Global Inc.  at prices ranging from a high of P5.32 to a low of P5.09. increasing its holdings to 3,752,646,194 shares, or 36.54 percent. A filing in connection with the stockholders’ meeting in September 2007 of  Alliance Global showed  Andresons Group owned 3,731,954,194 shares, or 36.339 percent and Yorkshire Holdings Inc., 1,440,959,842 shares, or 14.028 percent. The same filing identified businessman Andrew Tan as chairman of the board and principal stockholder of both corporations. Foreign-owned AGI  shares are listed in the name of Standard Chartered Bank, with 636,677,300 AGI shares, or 6.19 percent, and Deutsche Bank AG, with 576.264 million shares, or 5.611 percent.

www.duediligencer.com

AYALA Land Inc. (ALI) will allot a larger capital expenditure this year to fund its residential, mall and office developments.

Harbour Centre eyes P3-B IPO

HARBOUR Centre Port Terminal Inc. is raising as much as P3 billion from a planned domestic public offering in the second half of 2008.

Mabuhay Satellite Corp., a unit of Philippine Long Distance Telephone Co. (PLDT), said Tuesday it had sealed a deal with Viettel Corp., a telecom provider in Vietnam, to help augment the latter’s network.

THE National Telecommunications Commission (NTC) has allowed broadcasting firms to extend pilot tests on their digital television, whether through terrestrial or handheld service, until March this year amid protests from a group of cable TV providers.

STOCKS on Wednesday fell on concern the US may sink into a recession after home sales dropped more than forecast in the world’s biggest economy and oil prices remained above $96 a barrel.