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THE
Philippine Stock Exchange (PSE) may have to increase its
outstanding capital stock to 32.287 million common
shares to reduce the ownership percentage of
stockbrokers to the 20-percent limit as required under
the Securities Regulation Code.
(The number here is only theoretical as
the computation assumes that the stockbrokers will
prefer to stick to their present ownership and are not
selling some of their holdings, as the Securities and
Exchange Commission has required them to do to make
their PSE ownership legal.)
PSE will
hold its annual stockholders’ meeting on Saturday, May
17, 2008 at
9 a.m. at the PSE Tektite Trading floor,
PSE
Center, Exchange Road, Ortigas Center, Pasig City.
PSE still maintains15.278 million
outstanding shares, which it issued in 1994 when it
became a stock corporation. It was originally registered
with the Securities and Exchange Commission as a
nonstock corporation on July 14, 1992.
Two years after it became a stock
corporation on August 3, 2001, PSE implemented
demutualization by issuing 50,000 shares each to its
member brokers.
In addition, it also sold 6.077 million
shares to what it called strategic investors such as
PLDT Beneficial Trust Fund, SMC Retirement Fund,
Government Service Insurance System, Kim Eng Investment
Ltd. and KE Strategic Pte. Ltd. The two foreign
investors are Singaporean.
These issuances left the exchange with
21.522 million unissued shares out of its authorized
capital of 36.80 million common shares.
Based on available reports, PSE’s
stockbrokers originally owned 9.20 million shares, or
60.22 percent of 15.278 million outstanding shares.
A letter dated August 13, 2007, signed
by Vicente Graciano Felizmenio Jr., officer in charge of
the SEC’s market regulations department, showed the
brokers’ ownership has already dropped to 6.458 million
shares, which at 42.27 percent remains way above the
20-percent legal limit.
The solutions to the 20-percent
ownership issue should have been forthcoming as the
board has already approved a number of recommendations
that should finally resolve it.
But in a second amended definitive
information statement, PSE decided to withdraw from the
meeting’s agenda the board-approved restructuring plan
in Saturday’s annual meeting.
Under the plan, PSE would not adopt the
scheme implemented by Philippine Long Distance Telephone
Co., whose common shares are majority-owned by
foreigners led by the Indonesian-owned First Pacific Co.
and its strategic partner, Nippon Telegraph and
Telephone Corp. of
Japan.
These two foreign stockholders alone combine for over 50
percent of PLTD’s outstanding common voting shares.
In complying with the 40- percent
ownership limit, PLDT includes preferred shares it has
issued to its subscribers and investors in the
computation of the ownership ratio between Filipinos and
foreign stockholders. This allows Filipinos to control
close to 90 percent of PLDT’s outstanding capital stock.
Only last year, Ayala Land Inc. and PNOC
Energy Development Corp. solved their predicament when
foreigners exceeded the 40- percent limit by issuing
preferred shares.
In the case of PSE, its board decided on
a more complicated process: issuance of “primary shares
of up to 25 percent of the outstanding capital stock and
warrants which shall not result in a dilution in excess
of 120 percent with a strike price of 120 percent to 150
percent and with maturity of three years.” In addition,
as approved by its board, the exchange would implement
an employee stock option plan.
While the restructuring plan was taken
off the agenda, PSE said the meeting’s agenda will
retain ratification of the declaration of 100-percent
stock dividend and the increase in PSE’s authorized
capital stock to 97.80 million common shares from 36.80
million common shares with par value of P1 each. |
