Shares of Victorias Milling Corp. soared by 931 percent on Monday after the Philippine Stock Exchange lifted a 15-year trading suspension on the local sugar giant.
VMC’s share price closed at P2.99 apiece from P0.29 when it was last traded on October 8, 1997, giving the sugar firm a market capitalization of P587.14 million.
Some 2.23 million common shares valued at P8 million were traded on the local stock exchange.
“That’s 15 years’ worth of information that has not been priced into the stock. The market needed to digest all that in a single day and maybe a few more,” said Jose Mari Lacson of Campos Lanuza & Co.
The Securities and Exchange Commission directed the PSE in 1997 to suspend the trading of VMC’s shares, citing “fraudulent misrepresentation of material information” in the registration statements, as well as in the continuing disclosures.
VMC has since undergone a creditor-driven corporate rehabilitation program.
It is now controlled by the Lucio Tan group of companies, which provided a crucial lifeline to the sugar firm after it had been crippled by the Asian currency turmoil. The public held 24 percent of its stock.
In a statement, VMC expressed its gratitude to the SEC led by chairperson Teresita Herbosa for what it described as an “unflinching support” to the sugar firm’s rehabilitation.
It also thanked the PSE for allowing the resumption of trading on the company’s shares.
“VMC also recognizes the continued support which its creditors have provided all these years, and its shareholders for their patience and understanding. To its trading partners, the company is equally grateful,” said a statement issued by VMC chairman Wilson Young.
The lifting of the trading suspension is seen to benefit VMC and its shareholders because it will give a market value indication and mechanism for investors to look at VMC as an investment opportunity.
VMC now seeks to renegotiate the terms of its rehabilitation plan with creditor banks, aiming to slash P5.86 billion in remaining debt stock faster than originally envisioned given the sharp decline in interest rates over the years.
The proposed changes to the terms with creditors are expected to strengthen the company’s balance sheet and make it more globally competitive by 2015 when sugar tariffs across the Association of Southeast Asian Nations drop to within a range of zero to 5 percent, from the current 28 percent, VMC officials said.