UNUSUAL surge. The Philippine Stock Exchange (PSE) noted an “unusual movement in the trading of Manila Broadcasting Co. [MBC] shares” on September 26 and asked the company, which owns and operates radio station DZRH, to explain the stock’s 50-percent surge to P1.50 from P1. In response, MBC said this “might be attributable to our declaration of P0.30 dividend per share, which is payable on October 12 to all stockholders as of October 5. The explanation is contained in a letter signed by Rudolph Steve E. Jularbal, MBC corporate secretary. The company is one of the market’s rarely traded stocks. In 2010, only 571,415 MBC shares changed hands at P1 per share. Records posted on the PSE website shows Tuesday’s trading on 43,000 MBC shares at P1.05 each was the first this year. MBC had piled up retained earnings of P218.850 million from which will be taken the P120.841-million dividend payout. In the first six months of 2011, MBC posted a net profit of P20.682 million, down 18.971 percent from P25.524 million in the same period last year.
Ownership profile. Businessman Fred J. Elizalde, chairman of the board since 1985, and his family are the majority stockholders of MBC. Elizalde Holdings Corp. and Elizalde Land Inc. hold 139.559 million MBC shares, or 34.65 percent, and 120 million MBC shares, or 29.80 percent, respectively. Romulo Mabanta Buenaventura Sayoc & Delos Angeles Law Offices is listed as holder of 69.911 million MBC shares, or 17.36 percent, with lawyer Reynaldo Geronimo as “beneficial owner” and “trustee/partner,” and Cebu Broadcasting Co., an MBC subsidiary, with 50 million MBC shares, or 12.42 percent, with Robert A. Pua, MBC vice president, as “beneficial owner/trustee.” This ownership profile, which has not recorded any substantial change over the years, makes MBC one of the market’s listed but not public companies. As of June 30, a company filing on its top 100 stockholders shows the same significant stockholders. PCD Nominee Corp., which acts as record stockholder for the public, holds 1,167,996 MBC shares, or 0.29 percent, as of June 30, the same number of shares it held as of September 30, 2010.
Outsourcing fees. Elizalde, who is also the chief executive officer at MBC, is the only official listed in the company’s payroll. He got P6.50 million in salary in 2009, the same pay he received last year and will get this year. He had the same amount of bonus—P390,933—in 2009 and 2010 but none yet listed for 2011. The rest of the executives, apparently, receive their compensation under the company’s “hating kapatid” system. In a footnote to its financial statement, MBC said under the system implemented in 2002, it outsourced “the operations of each radio station and support services to “former station managers and officers of the company.” As a result of the system, MBC tapped the companies owned and managed by certain stockholders and/or members of the board of the company which receives certain percentage of collection as service fees. These fees amounted to P214.30 million in 2010; P135.50 million in 2009; and P127.30 million in 2009. As of December 31, 2010 and 2009, outstanding fees payable amounted to P23.60 million and P24.30 million, respectively.
Quasi-reorganization. Benguet Corp. is implementing a quasi-reorgnization intended to clean up its books of accumulated losses or deficit. In a filing posted on the website of the Philippine Stock Exchange, Reynaldo P. Mendoza, Benguet corporate secretary, disclosed the company’s plan to wipe out its P2.2-billion deficit by applying “revaluation increments in land worth P1.7 billion” and capital surplus of P1.20 billion. The “paper cleanup” would not involve a reduction in par value of its shares because the revaluation increments and capital surplus of P2.7 billion even exceed the mining company’s deficit by P700 million. “The quasi-reorganization/equity restructuring is among the last steps needed to be taken by the company to complete the corporate restructuring process,” Benguet said in the filing dated September 27. This would mean putting back the company “on the path of dividend declaration,” according to the company. Benguet reported operating income of P60.857 million in the first six months of 2011 against operating loss of P14.70 million in the same period last year. Including “other income,” it registered a net profit of P580.110 million from January to June against net loss of P88.295 million in the same period in 2010. Benguet hit a 30-day high of P29.95 on August 15 and dropped to a month’s low of P19.98 on September 26.
Sharing profits. The board of Republic Glass Holdings Corp. approved on September 26 a total of 22.5-percent cash dividend, or 22.5 centavos, consisting of 15 percent, or P0.15 regular dividend, and 7.5 percent, or P0.075 special dividend, payable on November 22 to stockholders as of October 28. The dividend amounting to P166.121 million will be taken from the company’s unappropriated retained earnings of P511.254 million as of June 30, 2011.
Security Bank Corp. is distributing to stockholders P1 dividend—P0.50 regular dividend and P0.50 special dividend. The bank has yet to announce the date of payment and record date pending the approval of the Bangko Sentral ng Pilipinas. Security Bank had, as of June 30, a surplus of P18.911 billion and additional paid-in capital of P3.237 billion.
Alliance Select Foods International Inc. said its acquisition of 100 percent ownership of US-based Spence & Co. for $8.50 million is starting to pay off. In a filing, it reported the declaration of $600,000 dividend by the foreign unit.
