MPIC woos US investors

Infrastructure holding firm Metro Pacific Investments Corp. will make a pitch to North American investors in the depositary receipts market this week.

MPIC sent an advisory to prospective investors that it would discuss growth prospects at the Deutsche Bank Depositary Receipts virtual investor conference on June 19.  During the conference, Asian companies will be introduced to American depositary receipts (ADR) programs.

“The virtual conference is a new format for us and represents a cost-effective way to present to US investors in their own time zone,” said MPIC chief finance officer David Nicol.

“Our ADR program is part of our continuing drive to broaden investor interest in MPIC,” said Nicol, who will be the one to present to investors on Wednesday.

During the live, interactive online event, investors in North America may ask Asian companies about their businesses. They may also download a company’s information from a “virtual trade booth.”

If participants are not able to join the event live on the day of the conference, an on-demand archive will be available for 90 days.

Other Asian companies joining the ADR conference are Phoenix New Media, China Xiniya Fashion Ltd., New Oriental Education and Technology Group, China Digital TV, China Distance Education and Bona Film Group. All the other companies joining the virtual conference are based in China.

“Deutsche Bank is pleased to be the first bank to hold a depositary receipts virtual investor event of this type with Asia-based companies. Individual investors in the United States are offered unique access to these companies that are based in a different time zone. Deutsche Bank continues to focus on offering innovative ways for our clients to reach new investors,” said Edwin Reyes, global head of depositary receipts at Deutsche Bank.

MPIC set up its ADR program in August last year in a bid to increase its visibility and name recognition among US investors. Through its subsidiaries and affiliates, the company controls the largest water utility, electricity distribution, toll road operation and hospital network in the Philippines.

ADRs refer to negotiable certificates issued by a bank in the United States that serve as proxy to a specified number of shares traded on the stock exchange. They are denominated in US dollars, with the underlying security held by an American financial institution. The instrument is deemed to be a good option in acquiring an interest in a foreign company. It allows the investor to collect dividends and capital gains denominated in US dollars.

What was set up by MPIC was a “level 1” ADR program through Deutsche Bank. This is a simple non-capital raising activity. MPIC will not get the benefit of listing on the US stock exchange. However, its ADRs can trade over the counter and there are no reporting obligations to the US stock exchanges.

A “level 2” sponsored ADR allows the issuer to attain full listing on the US stock exchange. This means that the company has to comply with reportorial obligations.

“Level 3” is a capital-raising exercise, where the issuer sells ADRs to get new money.