The request for exemption was sought by the state financing institution based on rules and regulations implementing the Securities and Regulation Code (src). The rule states that the SEC may make the exemption "in connection with foreclosure proceedings involving a duly constituted pledge or security arrangement where the acquisition is made by debtor or creditor."
Last month, LBP acquired the shares in a debt-to-equity swap with RPC’s single biggest stockholder Profinda Holdings Corp., which owned 42.1 percent of RPC’s outstanding capital stock.
The transaction, valued at P54.18 million based on RPC’s last traded price of 15 centavos each, secured RPC’s loan obligation to LBP of P400 million. LBP is a creditor/pledgee of 376,242,648 RPC shares of stocks under a deed of pledge executed and delivered by Profinda Holdings.
"For failure of the borrower to comply with its loan obligation, LBP instituted foreclosure proceedings on June 22 and 29, 2001 in accordance with Articles 2116 of the Civil Code," the SEC said.
Under the src, a purchasing party is required to tender an offer to the remaining stockholders upon acquisition of at least 15 percent of a listed company or 30 percent within a 12-month period. These mandatory tender offer requirements are imposed to give the minority shareholders the opportunity to sell their shares at the same price as the majority shareholders in cases where there is a change in control of the company. – Conrado M. Diaz Jr.