SEC okays bank’s recapitalization
MANILA, Philippines—The Securities and Exchange Commission has approved Philippine Bank of Communications’ bid to beef up and simplify its capital base.
In a disclosure to the Philippine Stock Exchange on Tuesday, PBCom said the SEC had approved the company’s change in bylaws in connection with its capital restructuring.
The key components are the following:
- Reclassification of existing preferred shares to common shares;
- Reduction in the par value of all its common shares to P25 per share from P100 per share; and
- Increase in authorized capital stock to P19 billion divided into 760 million common shares with a par value of P25 per share.
The conversion of preferred shares into common shares is meant to simplify the bank’s capital structure into a single class of securities. Preferred stocks are prioritized in dividend distribution but are usually non-voting.
The preferred shares of PBCom were an offshoot of the Philippine Deposit Insurance Corp.’s financial assistance agreement in 2004 that required the shareholders then to subscribe to a different class of shares. That was a legacy issue which no longer exists, PBCom chair Eric Recto said.
PBCom was incorporated as one of the earliest non-American foreign banks in the country in 1939. Operations were interrupted during World War II but were immediately reconstituted in 1945 through the infusion of fresh funds. The bank came under full Filipino ownership in 1974 when a group of industrialists led by Ralph Nubla Sr. bought a majority stake. In 2011, ISM Communications Corp. obtained a controlling stake in the bank.