FOUR companies that raised capital by selling shares in the market have deviated from how they said they would spend the money from the shares sale, the Philippine Stock Exchange (PSE) said Tuesday.

These companies are Alliance Global Group. Inc. (AGI), iRemit Inc., Megaworld Corp. and Pepsi-Cola Products Philippines Inc.

The PSE has mandated companies that implement initial public offerings (IPOs) follow-on offerings and stock-rights offerings in 2006 and 2007 to submit a detailed report relative to the proceeds of their capital-raising activities.

After an evaluation of the reports given by the concerned firms, the PSE noted that the actual use of proceeds deviated from what they have disclosed in their respective prospectus.

AGI, which did a follow-on offering—or sale of additional shares—chose to prepay a P2.42-billion loan with Banco de Oro (BDO). In its prospectus, the company said its plans to repay only P1 billion of its loan.

In a letter to the PSE, AGI said it decided to prepay in full its loan with BDO “only because the interest cost of maintaining the loan unpaid was much higher than the interest income that could be earned from the amount used to repay it.”

The company, which has investments in real estate, quick-food service and manufacture of hard liquor, made P9.95 billion from the sale of additional sales.

iRemit, on the other hand, used a chunk of the money from the share sale for working capital and debt retirement, contrary to what was detailed in its prospectus. The company, which conducted an IPO last year, raised net proceeds of P466.2 million.

According the company, it temporarily used funds not for expansion but to retire short-term obligations and reduce debt-service burden and improve profitability.

“The use of these funds to retire such short-term obligations will benefit the company more and improve shareholder value compared to other investment alternatives,” it explained.

Meanwhile, Megaworld, the real-estate firm controlled by businessman Andrew Tan, exceeded the P3-billion budget allotted for the purchase of prime and strategic properties for the purpose of landbanking.

The budget was funded by the P10.14 billion in net proceeds from a stock-rights offer.

In a response to the PSE query, Megaworld said it disbursed a total of P3.001 billion, or a difference of over P1 million.

“Such difference represents costs incurred by the company incidental to the acquisition of land such as, but not limited to, legal cost, taxes and expenses related to the transfer of title to land,” it said.

FILINVEST Land Inc. and Megaworld Corp. paced a four-day climb among Philippine property stocks, the longest rally in more than two months, on speculation bank lending will boost home sales and office rents will rise.

Metro Pacific turns around from loss

METRO PACIFIC Investments Corp. said Tuesday it made a core net income of P194.9 million last year from a net loss of P25.4 million a year earlier.

FOUR companies that raised capital by selling shares in the market have deviated from how they said they would spend the money from the shares sale, the Philippine Stock Exchange (PSE) said Tuesday.

IP E-GAME Ventures Inc. (IP E-Games), a subsidiary of publicly traded IPVG Corp., has entered into a game-publishing and distribution deal with Korean game developer EST Soft.

VSSC Distribution Inc., an enterprise security-solutions provider, launched Tuesday the ForeScout Technologies clientless network access control (NAC) solutions in the Philippines.

NATIONAL Reinsurance Corp. of the Philippines said Tuesday its net income for 2007 rose 121 percent to P609 million from P275 million a year earlier.

Well-entrenched is the rule that by reason of the special knowledge and expertise of administrative departments over matters falling under their jurisdiction, they are in a better position to pass judgment thereon and their findings of fact in that regard are generally accorded respect, if not finality, by the courts (Palele v. Court of Appeals, 362 SCRA 141).