THE PHILIPPINE STOCK Exchange aims to widen fund-raising opportunities for petroleum and renewable energy (RE) companies with the issuance of a new listing and disclosure framework tailor-fit for this industry.
In a memorandum posted on Friday, PSE general counsel Joselito Banaag said the PSE board had approved for public comments the proposed framework, which was drafted in collaboration with the Department of Energy (DOE) and the Securities and Exchange Commission.
In general, petroleum and RE companies intending to debut on the PSE should comply with the general requirements for the second board listing and with the proposed supplemental listing and disclosure requirements applicable to petroleum and RE companies.
The PSE’s second board requires an operating history of one year, which is less stringent than the three-year track record required for those listing on the main board. Upon listing, the applicant must have a market capitalization of at least P250 million.
The sector-specific framework recognized that petroleum, RE and mineral resource companies, particularly those in the early stages of exploration and development, face certain constraints with regard to the requirements for initial listing. The listing of a petroleum or RE company is more complex in the Philippines than in Hong Kong, Singapore, Australia and Canada, constraining the flow of funds for the exploration and development of Philippine natural resources, the PSE said.
At the same time, the PSE recognized that local investors had limited ability to invest in and help develop natural resources in the Philippines because of the lack of listed natural resources companies.
“This deficiency seriously impedes the growth and development of the country. In these times of rising energy and commodity costs and global instability, a key to national security for any nation, especially a developing nation such as the Philippines, is the ability to exploit and develop its natural resources internally with less reliance on the global or outside market,” said the PSE draft, which will be open to public feedback until June 30.
Drawing from regulations imposed by local and foreign regulators on petroleum and RE companies, the PSE proposed that at a minimum, the listing applicant must demonstrate that:
• It is either an operator or a co-venturer (a company that holds adequate interest in a service contract having the same rights and obligations with all of the other co-venturers) of a valid and subsisting service/operating contract duly approved and awarded by the DOE.
• It should submit the required documents for petroleum and RE companies in addition to the regular documentary requirements of the PSE covering an initial public offering or a listing by way of introduction, whichever the case may be, under the second board listing rules of the exchange.