BIZ BUZZ: No more ‘doing a DITO’
Smarting from the brouhaha over DITO CME Holdings’ scuttled P8-billion stock rights offering (SRO), the Philippine Stock Exchange (PSE) is cracking the whip on underwriters and issuers to make sure that there will be no more unilateral terminations of equity deals, whether an initial public offering (IPO), follow-on offering or an SRO.
Heeding investors’ clamor for a tighter trigger for offering termination, issuers can no longer arbitrarily end their offerings. Ahead of the issuance of new rules, the PSE, as a self-regulatory organization, can scrutinize an issuer’s prospectus for any termination clause that may be disadvantageous to investors.
“Doing a DITO” is no longer an option.
A prospective issuer told Biz Buzz an offering could no longer be terminated once it has started.
Another source from the investment banking community confirmed this so: “We need PSE approval to cancel an IPO during the offer period or in the case of an SRO, after the ex-date (or once shareholders have already purchased additional shares at the designated exercise price). This is an offshoot of the failed DITO SRO.”
The source added that under discussion are some changes to the underwriting agreement.
As to why DITO surprisingly terminated its P8-billion SRO in late January, the buzz is that some cornerstone investors—believed to be the country’s two state-run pension funds—had backed out of the deal.
Industry sources said this was understandable because these pension funds would like to stay out of trouble, especially now that the country is set to elect a new CEO.
Will Davao-based businessman Dennis Uy still be as high-flying under either a Bongbong Marcos or Leni Robredo presidency? It seems that some investors are hedging their bets.
—Doris Dumlao-Abadilla
Dalmore via NFT
Liquors, especially those of the rare kind, no longer exist just to be consumed or displayed on bar shelves. They can now be converted into an investment in the form of digital asset on the blockchain.
Whyte & Mackay, one of the offshore liquor companies owned by tycoon Andrew Tan-led Alliance Global Group, is increasingly using nonfungible tokens (NFT) to sell rare products of its luxury liquor brand, Dalmore.
On March 29, the company will be selling an “extremely limited run” of 33-year-old whisky, The Dalmore Limited Edition Paulliac Premier Grand Cru Classe Cask Finish, exclusively as an NFT via digital platform BlockBar.
The first 10 Dalmore bottles will be made available to NFT holders via a lottery. The second drop of 213 bottles will launch on April 5 in a first-come, first-served format, based on an advisory from BlockBar, which specializes in NFTs created by luxury liquor brands.
The price tag for this limited run of Dalmore? It’s 2.79 Etherium or about $8,800—that’s about P459,000—each.
This isn’t the first time that Dalmore has taken the NFT route to auction off rare concoctions. It debuted into BlockBar’s platform in late 2021.
For those wondering whether they can consume their Dalmore NFTs, each NFT corresponds to a physical bottle. While the digital asset is lodged on the Etherium blockchain or distributed ledger, the physical asset that backs it is kept in a safe storage.
Buyers can track ownership of the rare liquor all the way back to the distillery. Holders can “burn” their Dalmore NFT anytime, which means the physical bottle will be shipped to them and the corresponding NFTs will then be taken out of circulation.
But while they are still holding these NFTs, they are free to sell their rare liquor or trade them on BlockBar’s digital marketplace.
—Doris Dumlao-Abadilla
Solar Philippines’ Indonesian foothold
Solar Philippines (SP), through its joint venture with Medco Energi, has signed 20-year power purchase agreements with Indonesia’s state utility PLN for one 25-megawatt solar farm in East Bali and one 25-MW solar farm in West Bali, which would be the largest ground-mounted solar project in Indonesia to date.
According to the firm, Solar Philippines granted Solar Philippines Nueva Ecija Corp.(SPNEC)—one of the hottest stocks on the local bourse nowadays—the option to subscribe for the parent firm’s share in the deal in which it holds 49 percent, subject to regulations including securing approval from PLN.
SP began developing these Bali solar projects in 2017, formed its deal with Medco to submit a bid in PLN’s first competitive utility-scale solar auction in 2019, and finally signed the power purchase agreement last week, with a schedule to begin construction by 2023.
The Medco-Solar Philippines tie-up beat several international power companies to win both projects in this auction.
“While this project is neither financially significant nor within our strategic focus of developing solar projects in Luzon, we hope this shows two things,” Solar Philippines founder Leandro Leviste said. “If we can do this in Indonesia, then we should do so all the more in the Philippines under the same model.”
“Second, that SPNEC has opportunities even beyond what has been factored into the share swap valuation. While the project development business is full of challenges, we are working so that, in the end, we may exceed expectations.”
Indonesia has one of the world’s lowest solar capacities per capita, estimated at less than 300 MW of operational solar for a population of 276 million. This is due to low power prices, and the scarcity of land in the most populous island of Java, which poses similar challenges in developing solar as Luzon.
—Daxim L. Lucas INQ
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