Biz Buzz: Naming rights brouhaha
Board directors of the Philippine Stock Exchange got the shock of their lives during a recent meeting when PSE chair Jose “Titoy” Pardo commented casually that he had received an invitation from Philippine Realty and Holdings Corp., the builder of the PSE Tektite Towers in Ortigas that houses one of the two trading floors of the local bourse.
According to our source, a surprised Pardo—and a surprised board of directors—asked an even more surprised PSE president Hans Sicat if he had moved unilaterally and approved what Philrealty was proposing to do sometime this week: To rename the PSE Auditorium at the ground floor of the Tektite Towers as the “Lanuza Auditorium” (the company is run by the Lanuza family).
Apparently, Sicat was just as shocked as everyone else, according to one official who was at that meeting.
As it turns out, the PSE had received neither request nor any sort of notification from Philrealty that it was going to rename the auditorium where the bourse usually holds its stockholders’ meetings, analysts’ briefings and events for retail investors.
Philrealty, of course, is a property firm that was very active in the 1990s, just before the 1997 Asian financial crisis crippled it and sent it on a long hiatus. Apart from the PSE Tektite Towers, it also developed the nearby Alexandra “condovision” (a subdivision of condominiums) and the Andrea project in New Manila that was dormant for more than a decade.
“The Tektite building is theirs and they’re still the building managers,” said one aghast PSE official, referring to Philrealty. “But the PSE is the anchor tenant and it explicitly states [in the contract] that we have naming rights for that.”
During that PSE meeting, we’re told that each director was quizzed about whether he or she knew what Philrealty was up to and each answered in the negative. As it turned out, the only advanced notice the PSE had was that invitation from Philrealty to the renaming ceremony.
Needless to say, the stock exchange bourse was offended to the point of being ready to take legal action, we were told. Hopefully, cooler heads prevailed and this mess can be sorted out before both sides come to (legal) blows. Daxim L. Lucas
Replicating Xurpas
Not too many people know that when Xurpas was first aspiring to go public, three big houses turned it down. Security Bank’s investment arm SB Capital Investment Corp., which had supported a number of mid-cap firms in their quest to go public in the last five years, agreed to take on the challenge. “I told them from the start that it was going to be difficult but we were willing to take the risk,” said Ricky Galang, head of SB Capital.
To market a profitable but small company to investors who are usually concerned with stock trading liquidity, Galang said the investment house did a lot of stuff that it would not do for normals clients. When other companies go public, they will usually have four or five one-on-one meetings with investors but in this case, about 40 such one-on-one meetings were arranged for Xurpas. There was even a time when the company had to meet with a big US fund five times, although in the end, this US fund could not participate because of the small size of the offering.
Xurpas’ IPO, however, was largely driven by three major anchors, one of which was a foreign group. Galang said several foreign investors likewise participated, sans a foreign underwriter. The youthful management of Xurpas, to their credit, didn’t have any diva attitude and gamely went through all the tedious meetings and heeded advice from the underwriter.
And because of this success with Xurpas’ stock debut, several companies of similar size are now knocking at SB Capital’s door for potential equity deals. Their key message to SB Capital: “We want you to do for us what you did for Xurpas.” The next mid-cap firm would likely file its IPO application early next year, Galand said. Doris C. Dumlao
Star power
Xurpas Inc. chief executive officer Nico “Nix” Jose Nolledo may be the face of this newly listed tech company, but when it comes to drawing star power, the one among the Xurpas triumvirate with the most show biz pull is Raymond Gerard Racaza. A triathlete, Raymond brought his Manila Polo Club teammates “Kuya” Kim Atienza and Isabelle Daza to glam up Xurpas’ listing ceremonies. Popular young actress Kim Chiu and celebrity stylist Liz Uy also graced the occasion. Kuya Kim emceed the IPO listing, which turned this triumvirate (which includes Fernando Jude Garcia) into the country’s newest billionaires.
So just after last week’s visit by international tennis superstars led by Andy Murray at the trading floor, celebrity sightings once again tickled the trading floor.
But apart from these show biz guests, Xurpas brought to the trading floor five characters from its new mobile game called Run Run Super V, the first Android game application developed by the company and the newest addition to its casual games portfolio. The five Power Ranger-looking characters are Red Star, Yellow Diamond, Green Clover, Pink Heart and Blue Spade.
Xurpas’ IPO has become a sort of a blockbuster movie, with a long line of retail investors lining up to be able to invest in this company, which has aspirations to go regional. Doris C. Dumlao
Early Christmas gift
After a two-year legal battle, PNOC president and CEO Tony Cailao finally received an early Christmas gift: A Supreme Court ruling clearing him and several executives of PNOC Exploration Corp. (PNOC-EC) of graft and plunder charges over a 2009 coal importation from Indonesia.
It was a vindication of sorts for Cailao, a veteran international banker and multiawarded former Citibanker, who spent the last two years trying to clear his name of what he called baseless and malicious charges.
The plunder and graft raps stemmed from a complaint filed by a former PNOC-EC director who claimed that Cailao, in conspiracy with officials of PNOC’s exploration arm, purchased 65,000 metric tons of Indonesian coal sans public bidding.
The same complaint alleged that the firm lost P123.7 million in extra shipping and storage costs when the original consignee refused to take delivery.
The Ombudsman, however, threw out the charges, saying that as a government-owned and -controlled corporation in the regular business of trading coal, PNOC-EC didn’t need to conduct biddings for buying and selling coal.
A final report from the Commission on Audit also proved that instead of alleged losses, the company even made P2.7 million after the coal was sold to another buyer.
As to the more serious offense of plunder, the Ombudsman—and later, the Supreme Court—said that the complaint has no factual basis.
It’s an early Christmas treat for him, indeed. Daxim L. Lucas
Calax reimbursement?
With the rebidding of the Cavite Laguna Expressway now set for next year, we understand that the Department of Public Works and Highways is studying the possibility of compensating original bidders for their expenses because a rebid was ordered.
After all, it costs millions of dollars to prepare a competitive bid for a project the size of Calax, including fees paid to an army of lawyers, bankers and consultants.
Now, details here are still hazy since nothing has been decided.
But the main question is this: Should those that participated in the earlier bidding get a form of reimbursement, likely with money generated from the new auction, for part of their expenses given that the original bidding process was scrapped on a wrong disqualification?
Things get more confusing when you consider a situation when a bidder participated before but would not in the second round, as the Ayala-Aboitiz tandem has already indicated.
Then again, the conglomerates that joined Round One are pretty wealthy. Perhaps it should be considered a further contribution to the Filipino people. And their take-away? Another lesson on doing business in the Philippines. Miguel R. Camus
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