PLDT blames bid of Gokongwei for stock price plunge

Philippine Long Distance Telephone Co. (PLDT) has blamed the planned takeover of the Gokongwei Group as the single biggest factor in causing investor sentiment to sour on the stock, leading to a gradual drop in its share price over the past month.

When the joint venture deal between Hong Kong’s First Pacific Co. Ltd. and the Gokongwei group was announced last June 5, PLDT stocks were trading at P457.50. Last Friday, it closed at a low of P307.50, losing P150 or a third of its value since.

"Whilst there could be no certainty as to which specific factor the decrease in our share price can be attributed, we believe that the announced transaction between First Pacific and the Gokongwei Group regarding the transfer of First Pacific’s controlling interest in PLDT to a joint venture to be owned PLDT blames…From B-1

two-thirds by the Gokongwei Group and one third by First Pacific has significantly affected investor sentiment on PLDT," corporate secretary Ma. Lourdes Rausa-Chan told the Philippine Stock Exchange (PSE).

Last week, PLDT shares took a severe beating as negative developments continued to pummel the stock. Analysts said the downgrade in its credit rating by Moody’s early last week could worsen PLDT’s risk profile, jeopardizing its dollar-denominated loans.

By Friday, news of its suit against First Pacific in the US sent the stock plummeting further, as investors remained in the dark as to what the PLDT board would do next in thwarting the deal.

PLDT shares were the most heavily traded last Friday, leading the market’s decline as it lost P32.50 or nearly 10 percent as the lawsuit, which it filed for First Pacific’s alleged violation of US Securities Law, added another factor of uncertainty on the Gokongwei-First Pacific deal.

"We continue to pursue our liability management program of which certain key components are already in place. We continue to make progress on other ongoing financing initiatives which we hope to complete over the next few months," Rausa-Chan pointed out.

At the end of yesterday’s trading, however, PLDT shares rebounded by P7.50 or 2.4 percent to P315, primarily on account of its steady price in Wall Street.