Biz Buzz: ‘Lucrative transparency’
Transparency is good and, apparently, lucrative.
That virtue was on full-display this week with 2GO Group Inc., which recently restated two years’ worth of financial statements, triggering a major accounting issue unseen here in a long time.
Because of the restatement—showing inflated earnings, equity and a major and suddenly callable debt burden—2GO was placed on a two-day trading suspension, which was lifted Wednesday after it provided more details to the Philippine Stock Exchange.
2GO had bet that coming out with details, which unfortunately pit audits made by SGV & Co. and KPMG against each other, was the right step in terms of corporate governance.
That bet paid off for investors that stuck around.
2GO, after a 27-percent drop early Wednesday, saw a strong recovery and ended just below its close before the restatement revelations. It gained another 7 percent yesterday.
For those who caught the bottom and held on, that’s a 43-percent windfall.
This is all the more remarkable given that 2GO has appreciated over 200 percent this year. That says a lot about investors’ belief in the company’s prospects under the Sy family’s SM Investments Corp. and businessman Dennis Uy. —MIGUEL R. CAMUS
Miascor in Kalibo
Aviation support services firm Miascor has been quietly laying the groundwork for the expansion of its inflight catering services and, recently—while no one was paying attention—opened a new facility in the Kalibo Airport to serve the growing number of flights operating to and from Aklan.
It goes without saying, that Miascor’s multimillion-peso investment in the new facility (its third inflight catering center, after Manila and Clark) is counting on the continued growth of tourist traffic to the famous beaches of Boracay Island.
The new Kalibo facility sits on a 1,500-sqm property and will employ 50 skilled and professional chefs and support personnel. They can even prepare halal food if the client demands it. Miascor wants the level of service here to be on par with the standards at its main facility in Manila, as well as that of its Swiss partner Gate Gourmet.
And so it should be, given the volume that the airport sees nowadays.
Kalibo airport is a busy place, with an average of 30 aircraft landings and another 30 takeoffs on any given day (and we’re talking about the off-peak season). Mostly, we’re talking about local and domestic flights from Philippine Airlines, PAL Express and Cebu Pacific, but Kalibo also gets international flights courtesy of the likes of AirAsia (both the Malaysian and Philippine varieties), Xiamen Airlines, Tiger Air and Silkair, among others — all using single aisle jets like the Airbus A320 or A321, and the Boeing 737 series.
All told, the inflight catering outfit can prepare as over 1,000 meals per day. Impressive.
Miascor is owned by businessman Ricardo Delgado of Citadel Holdings. The firm also does aircraft ground handling and logistics. If that isn’t too familiar, perhaps older readers will remember their 1990s-era mobile phone firm called Islacom, which was eventually acquired by Globe Telecom.
The question now is: How will business be affected by the rapidly expanding Caticlan Airport of San Miguel Corp. which is just a stone’s throw away from Boracay itself? This should bear watching. —DAXIM L. LUCAS
Expanded role
After getting firm commitment from other shareholders to cede shares that will allow it to control the majority of capital market infrastructure group PDS Holdings Corp., the Philippine Stock Exchange is now thinking of how the prospective integration could be seamlessly executed.
Recently, the PSE moved another step closer to its goal of merging with PDS with a deal to buy the 8-percent stake held by IT provider Whistler Technologies Services Inc., which will allow the PSE to increase its stake in PDS to 52.78 percent. This was after earlier obtaining a commitment from the Bankers Association of the Philippines and affiliate firms—the single biggest stockholder of PDS—to sell their 23.8-percent interest.
The PSE is offering to buy out all other shareholders of PDS in line with its plan to unify capital market infrastructure in the country. To date, it already owns 20.98 percent of PDS. Another key voting block is Singapore Exchange Ltd., which owns around 20 percent. Other shareholders are: San Miguel Corp. (4 percent), Tata Consultancy Services (8 percent), Financial Executives Institute (3.1 percent) and Development Bank of the Philippines (3.1 percent).
As leadership is crucial to the execution of the much-anticipated merger, we heard the PSE is considering to appoint its president and chief executive officer Ramon Monzon as concurrent CEO of PDS.
A seasoned CPA and successful businessman who founded the Miss Earth beauty pageant that has become a global tilt, Monzon has been described as someone who can “take the numbers,” “sleep with numbers” and interpret them well. He is thus seen in a good position to handle such expanded responsibility.
The merger is subject to certain closing conditions, including approval by the Securities and Exchange Commission of any exemptive relief for PSE to own more than 20 percent of an exchange alongside the approval of other relevant regulatory agencies like the newly created Philippine Competition Commission. —DORIS DUMLAO-ABADILLA
Hired… and promoted
Credit Suisse announced yesterday that newly hired Michael De Guzman was appointed country manager for the Philippines.
This is in addition to his existing role as head of Philippine coverage for investment banking and capital markets. Before joining Credit Suisse, De Guzman was the Philippines office head for Macquarie Group and head of Macquarie Capital Philippines for eight years.
In this new role, De Guzman will report to Francesco de Ferrari in his capacity as CEO Southeast Asia and Frontier Markets.
Commenting on De Guzman’s appointment, De Ferrari said “As Credit Suisse continues to expand our domestic footprint in the Philippines and across Southeast Asia, we are focused on deepening our country leadership onshore. With his deep experience and understanding of the Philippines market, Michael is well established to further drive collaboration across the bank in delivering our integrated platform to our clients in the Philippines.”
The Philippines is an important part of Credit Suisse’s Southeast Asia franchise, and where the bank has been a leading financial advisor since 1992. Credit Suisse has advised on numerous landmark and innovative transactions in the country, including the Republic of the Philippines accelerated switch tender offer and $2 billion notes offering which marked the bank’s 17th bond offering and/or liability management deal led for the ROP since 2004, and a $1.2 billion rights issue for BDO Unibank.—DAXIM LUCAS
