MANILA, Philippines–The Philippine Stock Exchange has approved the voluntary delisting of Chemrez Technologies Inc. effective Jan. 10 next year but subject to the completion of a new round of tender offer where investors will not benefit from preferential tax rates.
In a disclosure on Wednesday, Chemrez said it had obtained approval from the PSE to delist subject to prior payment of the voluntary delisting fee, completion of the tender offer and submission of a financial tender offer prior to delisting date.
The new round of mandatory tender offer, however, is more challenging as parent D&L Industries will have to undertake this while Chemrez is under trading suspension, which means that regular capital gains taxes and other taxes will apply.
The PSE denied the group’s request for a temporary lifting of the trading suspension for purposes of crossing shares subject to the tender offer conducted as a prerequisite for delisting.
The exchange said it could not lift the trading suspension as it might be viewed by the Bureau of Internal Revenue as a violation of a tax ruling that gives preferential tax rates only to trades under a stock transaction tax regime.
While trades of listed companies are given a preferential tax rate of ½ of 1 percent, any transfer or sale of shares processed outside the exchange would be subjected to capital gains tax of 5 to 10 percent of net capital gains aside from documentary stamp tax of P0.075 per P200 and value-added tax on gross receipts.
The PSE suspended trading on Chemrez in October following the completion of a tender offer made by food and plastic input manufacturer D&L Industries, which made the former a 99-percent owned subsidiary.–Doris C. Dumlao