DIVIDENDS before IPO. A subsidiary of Cirtek Holdings Philippines Corp. (CHPC), which is listing its shares on the Philippine Stock Exchange, gave out a total of $5-million cash dividend in three phases before CHPC was to sell shares through an initial public offering (IPO). In a filing in connection with the IPO, CHPC said Cirtek Electronics International Corp. (CEIC), which was incorporated in British Virgin Islands (BVI), Cirtek Holdings Corp. declared $64 per CEIC share dividend, for a total of $3.2 million, on February 4 and $26 per CEIC share, for a total of $1.30 million, on February 11. CHPC paid both dividends after its acquisition of CEIC, along with Cirtek Electronics Corp., from Cirtek Holdings Corp. On March 1, the board of CEIC approved the distribution of $10 dividend, or $500,000. CHPC, the parent company, reported consolidated retained earnings of $9.21 million, or P399.59 million, as of June 30. From 2008 to 2010, it has been reporting additional paid-in capital of $6.008 million, or P260.673 million, which was all attributed to CEIC. The amounts disappeared from its audited financial report for the first six months ended June 30. In its filing, CHPC explained: “Prior to 2011, the combined paid-in capital of CEC and CEIC were used as capital.”
• Ownership profile. The Liu family owns Carmatheus Holdings Inc. and Charmview Holdings Inc. which, in turn, own Camerton Inc. with 60 percent and 40 percent respectively. Camerton is the parent company of Cirtek Holdings Philippines Corp. (CHPC), which is in the process of going public, and which replaced Cirtek Holdings Corp. (CHC) as the Liu family’s flagship by acquiring from the latter its two units—Cirtek Electronics Corp. and Cirtek Electronics International Corp., which was registered in the British Virgin Islands. CHPC paid CHC a total of P260 million for the acquisition of the two companies—155,511,952 CEC shares for P130 million and 50,000 CEIC shares for P130 million. The deal was covered by a deed of sale dated March 1. Incidentally, CHPC would net P276.183 million from the sale of 42.163 million CHPC shares at the IPO price of P7 each.
• Dilution. Prior to the initial public offering, the Lius own the entire outstanding capital of 120 million shares in Cirtek Holdings Philippines Corp., held by Camerton Inc. and 10 nominees with one share each. The nominees include Jerry Liu, chairman and president; Nelia T. Liu, a director; Justin T. Liu, Michael Stephen Liu, Brian Gregory Liu, assistant corporate secretary; Nicanor P. Lizares, Anthony S. Buyawe, treasurer and chief finance officer; Jorge Aguilar; Martin Ignacio P. Lorenzo, chairman and president of Pancake House Inc., independent director; and Ernest Fritz Server, vice chairman of RFM Corp., independent director. After the IPO, they will own the same number of shares but would be diluted to 77 percent by the public investors who would end up owing 42.163 million shares, or 26 percent. In taking their company public, the Lius have adopted a policy of distributing as dividend 30 percent of CHPC’s net profit of preceding fiscal year. In the first half of 2011, CHPC reported net profit of P72.927 million, which resulted from net sales of P795.701 million.
• Ownership update. Sumitomo Metal Mining Philippine Holdings Corp. increased the number of shares it owns in Nickel Asia Corp. to 337.790 million shares, or 25.211 percent, from 333.434 million shares, or 24.886 percent, by buying a total of 4.356 million shares in the open market in various trades from October 3 to 19. The acquisition cost Sumitomo P69.569 million at prices ranging from a low of P16.4381 to a high of P18.958. In its latest ownership filing as of September 30, Nickel Asia listed Manuel B. Zamora Jr. as its single biggest stockholder with 303.977 million shares, or 22.69 percent, followed by Sumitomo with 256.828 million shares, or 19.17 percent. The others significant stockholders were Luis J.L. Virata, 176.382 million shares, or 13.16 percent, and Philip T. Ang, 152.934 million shares, or 11.41 percent. PCD Nominee Corp. holds 278.739 million shares, or 20.80 percent, for Filipinos and 83.146 million shares, or 6.21 percent, for foreigners. In a separate filing, Nickel Asia identified Zamora as the beneficial owner of 55.293 million shares, or 4.13 percent, held by Mantra Resources Corp. It also named Ang as the indirect owner of 27.819 million shares, or 2.08 percent, held by Ni Capital Corp. Nickel Asia Holdings Inc. holds 720 million Nickel Asia voting preferred shares. This holding company’s stockholders are Zamora, Ang, Virata and Sumimoto Metal Co. Ltd.
• Out of the board. From an independent director of Philippine Long Distance Telephone Co. since April 2005, Oscar Reyes became a PLDT regular director in view of his appointment as senior executive vice president of Manila Electric Co. effective August 2010. Now with the Gokongweis owning a significant block of PLDT shares resulting from a swap of the family’s majority holdings in Digital Telecommunications Philippines Inc. with PLDT shares, they are entitled to a seat in the board of the telecom giant. Reyes then had to make a way for the nominee of Gokongwei’s JG Summit Holding Inc., which owns 27.512 million PLDT shares, or 12.83 percent. The nominee, however, was not businessman John Gokongwei Jr. the family patriarch but his brother James L. Go, who was also appointed a member of PLDT’s technology strategic committee. PLDT has not totally given up on Santos, who became “a member of the advisory board/committee immediately.” Go, who now owns 27,001 PLDT common shares worth P66.746 million at 30-day high of P2,472, is one of the busiest executives in the Gokongwei-controlled conglomerate. He is chairman and chief executive officer of JG Summit Holdings Inc., Universal Robina Corp., Robinsons Land Corp, JG Summit Petrochemical Corp., CFC Corp., Robinsons Inc. and Oriental Petroleum and Minerals Corp. Reyes, on the other hand, joined PLDT from Shell group where he was country chairman of the Shell companies in the Philippines from 1997 to 2001 and concurrently managing director of Shell Philippines Exploration B.V. from 2002 to 2004. He was also the CEO adviser at Pilipinas Shell Petroleum Corp. from 2002 to 2004.
