PAL Holdings Inc., the holding company of businessman Lucio Tan that owns Philippine Airlines (PAL), is only one of 40 or so companies listed on the Philippine Stock Exchange but are not yet public. As of July 15, when PAL Holdings filed a disclosure in connection with its annual stockholders’ meeting, it listed Trustmark Holdings Corp. as owner of 5.297 billion common shares equivalent to 97.708 percent of outstanding voting capital. This means the public investors own only 124.232 million shares, or 2.292 percent. The PSE rule provides for minimum public ownership of 10 percent.
Incidentally, PAL Holdings will hold its annual stockholders’ meeting on September 30 and it does not include the additional share offering among the items in the agenda to make the company compliant with the 10-percent minimum public ownership rule.
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Instead, its filing focused on what it intends to do to make the airline profitable, which may be a tall order given its huge pile of deficits which amounted to P14.980 billion as of June 30. In the second quarter, PAL Holdings reported a net loss of P453.971 million against a net profit of P1.603 billion in the same period in 2010. This is a financial profile that brings bad news to the employees of PAL the airline. To reduce these huge losses, it told regulators that it “will implement the outsourcing of its in-flight catering operations, airport services operations and call center operations,” a corporate plan which it said has been upheld by Malacañang. The outsourcing, according to PAL Holdings, “will result in a reduction of about 2,600 employees, or 36.308 percent of the current 7,161 employees.
As PAL retrench its workers, will PAL Holdings say goodbye to the PSE after staying listed via the backdoor using Baguio Gold Mining Co., which was a listed mining company?
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It would be a very big embarrassment for the Aquino administration if PNOC Exploration Corp. (PNOC-EC) is delisted under its watch simply because, like PAL Holdings, it is listed but not public. Not that the public investors are eagerly awaiting the Cabinet’s position or better still, approval, of exploration subsidiary of the government-owned Philippine National Oil Co. (PNOC). But more importantly perhaps is for the government to set a good example for the private sector by allowing the partial privatization of PNOC-EC, After all, the government would lose only 10 percent of its 100-percent ownership of the company. What is losing 10 percent to Filipino investors if in return the Philippines gains a notch higher in the approval rating of investors.
PNOC-EC’s outstanding capital stock consists of 1.522 billion common A shares, which are exclusively for Filipinos, and 479.751 million common B shares which are open for ownership by both Filipinos and foreigners. Since it listed its shares on the exchange, it has been owned almost 100 percent by PNOC, which holds 1.522 billion common A shares, or 76.04 percent, and 475.532 common B shares, or 23.75 percent.
Recent reports had it that PNOC-EC chief, former Manila mayor Gemiliano Lopez Jr., had already submitted the proposed for Cabinet approval the share offering of PNOC-EC after this has been getting blocked by the board of its parent company. The fate of PNOC-EC on staying a listed company now depends on President Aquino.
Will PAL Holdings, PNOC-EC and other listed companies which have not followed yet the regulatory public ownership rule be able to meet the deadline set by the PSE?
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Business opportunity. TheTurkish Chamber of Commerce of the Philippines is announcing a good business opportunity for Filipinos who may be interested in distributing various products from Turkey. These products, which will be arriving sometime next month, include sunflower seeds and pumpkin seeds; flour wheat and animal feeds; and carpets.
