PSE proposes direct listing of preferred shares
MANILA, Philippines – The Philippine Stock Exchange (PSE) is proposing to allow companies to directly list preferred shares without first conducting a public offering, a move aimed at giving issuers greater flexibility in raising capital through the local bourse.
In a second draft, the PSE sought comments from market participants on additional amendments to its proposed rules governing initial listings through preferred share offerings. Comments will be accepted until June 25.
The proposal builds on an earlier consultation done last April and incorporates feedback received from stakeholders.
Under the revised framework, companies may list preferred shares through either an initial public offering (IPO) or a direct listing, even without listing their common shares.
“To provide issuers with greater flexibility, the exchange revised the draft Rules on Initial Listing through Preferred Shares Offering to allow the direct listing of preferred shares as an alternative to traditional IPOs,” the PSE said.
One of the key features of the proposal is the introduction of a direct listing mechanism, which would allow preferred shares to become immediately tradable upon listing on the exchange without a prior public offering.
Broader participation
To ensure broader investor participation, issuers that choose the direct listing route would be required to distribute or sell at least P50 million worth of the same class or series of preferred shares to a minimum of 100 investors within one year from listing.
The sale may be undertaken by the issuer, its existing shareholders or a designated arranger or issue manager.
The draft rules also exempt direct listings from several requirements normally associated with public offerings, including the engagement of underwriters, stabilization funds, minimum public offering thresholds and lock-up provisions.
For direct listings, issuers would be required to determine the initial listing price based on a fairness opinion prepared by an independent and reputable firm, with the valuation details disclosed in the prospectus. INQ
