PSE completes P2.9B rights offer

Listing of PSE’s P2.9B stock rights offer shares: Shown in photo (L-R): PSE Treasurer Omelita J. Tiangco; PSE COO Roel A. Refran; PSE Director Eddie T. Gobing; PSE President and CEO Ramon S. Monzon; PSE Chairman Jose T. Pardo; PSE Director Alejandro T. Yu; PSE Corporate Secretary Aissa V. Encarnacion and PSE Director Emmanuel O. Bautista

The Philippine Stock Exchange (PSE) has completed a P2.9 billion stock rights offering, proceeds from which are mostly meant to fund an acquisition that will unify the country’s capital market infrastructure.

The new 11.5 million new shares issued by the PSE at P252 per share were listed on Thursday after a bell-ringing ceremony.

“This SRO (stock rights offering) provided investors greater opportunities to own shares of PSE, which has been profitable for several years and regularly distributes a substantial amount of dividends to shareholders year in and year out. Now that the shares can be traded in the market, investors can be shareholders of a bigger, more robust PSE,” PSE chair Jose Pardo said in his remarks during the listing ceremony.

Eduardo Francisco, president of BDO Capital & Investment Corp., said the offering was oversubscribed, adding, however, that was he was not authorized to disclose by how many times the oversubscription was relative to the base offer. Subscribers were mostly domestic investors, he noted.

BDO Capital and First Metro Investment Corp. were the lead underwriters for the offering, which ran from March 12 to 16.

About 55 percent of the proceeds from this offering will be used to repay debt to be incurred in connection with the PSE’s plan to acquire the Philippine Dealing Systems Holdings Corp. (PDS Group), the holding firm for fixed-income trading platform Philippine Dealing and Exchange Corp., Philippine Depositary and Trust Corp. and Philippine Securities Settlement Corp. It is uncertain, however, on whether this transaction can proceed.

“We just have to wait for SEC ( Securities and Exchange Commission) exemptive relief for PSE to buy PDS shares,” Francisco said, referring to a request from the PSE to be exempted from the 20 percent limit that any single industry can own in an exchange.

Such exemptive relief is a pre-condition to the closing of deals that will raise the PSE’s interest in PDS to 72 percent.

But in the event that the PDS deal falls apart, the PSE has provided for alternative uses for the proceeds.

“They will still use proceeds for system upgrades and other improvements,” Francisco said.

The P2.9-billion stock rights offering allows the PSE to dilute the cumulative shares of stock brokers and eventually comply with the single-industry ownership limit of 20 percent.

Meanwhile, a rival bid to take over PDS has emerged from the state-controlled Land Bank of the Philippines.