The Philippine Stock Exchange (PSE) has moved to March a stock rights offering worth as much as P3.16 billion in order to avoid the turbulence currently affecting global markets.
“The PSE has decided to adjust the schedule of its stock rights offering given the unfavorable global market conditions affecting the domestic capital market,” PSE said in a disclosure on Thursday.
Racing against time to acquire 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.—the PSE was supposed to sell up to 11.5 million common shares to eligible shareholders this month.
The acquisition is facing derailment from Land Bank of the Philippines, which was recently ordered by the Department of Finance to make a bid for PDS. Finance Secretary Carlos Dominguez III had expressed frustration over PSE’s alleged failure to follow ownership structures mandated by law.
The PSE has already promised the stock rights offering would not be opened to brokers to achieve the goal of diluting the combined ownership of trading participants. This is in compliance with a provision in the Securities Regulation Code capping single-industry ownership of any operating exchange in the country at 20 percent.
Based on the new timetable, the offering will begin on March 12 through March 16 while listing is targeted for March 22.
Markets across the globe have seen massive sell-offs caused by expectations of rising US bond yields and higher inflation, thus forcing PSE to take a step back and recalibrate.
The PSE’s stock rights offering was supposed to run from February 26 to March 2.
The maximum offer price is P275 per share but this will be finalized on February 23.
The shares will be made available to eligible shareholders as of March 1. The entitlement ratio has yet to be determined.
About 51 percent of the proceeds from the offering would be used to repay PSE’s debt expected to be incurred in connection with its plan to acquire PDS. The local bourse has already signed deals with multiple parties giving it 69.03-percent control of PDS.
The rest of the proceeds would then be used to develop new products, such as trading platforms for commodities and derivatives, as well as working capital for its new headquarters in Bonifacio Global City.
The PSE has mandated BDO Capital and First Metro Investment Corp. to arrange the stock rights offering. —DORIS DUMLAO-ABADILLA