PSE completes sale of 40% equity to private investors

The Philippine Stock Exchange (PSE) completed yesterday the private placement of its shares to institutional investors with the sale of an additional 812,095 primary shares for P97.04 million.

The shares account for the remaining 3.6 percent of the PSE common shares sold to institutional investors pursuant to the underwriting agreement signed between the exchange and its financial advisor ATR-Kim Eng Capital Partners Inc. The shares were sold at P119.50 per share, a substantial discount from the current price of P150.

Of the total shares offered, 317,238 were sold to foreign consultancy firm Equinox Partners and 199,254 were issued to publicly-listed holding company A. Soriano Corp. (Anscor), which has interests in port container services, power generation, aviation, wire and cable manufacturing, and real estate.

Earlier, the Government Service Insurance System (GSIS), the Philippine Long Distance Telephone Co. (PLDT), Beneficial Trust Fund, the San Miguel Corporation Retirement Fund, Kim Eng Investment Ltd. and KE Strategic Pte. Ltd. subscribed to the remaining 295,603 shares of PSE. The GSIS, PLDT Beneficial Trust Fund, and SMC Retirement Plan each bought 73,901 shares while KE Strategic and Kim Eng Investment each acquired 36,950 shares.

With the acquisition of additional shares, the GSIS, PLDT Trust Fund, and SMC Retirement Fund now hold a total of 1.39 million PSE shares each, equivalent to an ownership of at least 10 percent.

The PSE raised about P726 million from the private placement which will be used to develop the exchange’s infrastructure to support business efficiency, fortify its working capital, and address other concerns that benefit the shareholders.

This move came after the Securities and Exchange Commission called the PSE’s attention that only 0.75 percent of the PSE shares have been traded a month since its listing.

The exchange listed 9.2 million of its shares on the local bourse in December 2003 as an initial step towards demutualization.

PSE said the sale of shares to institutional investors will be a major leap towards achieving full demutualization and bringing the PSE at par with the other demutualized and listed exchanges in the region such as the Australian, Hong Kong and Singapore stock exchanges and even ahead of other exchanges in Southeast Asia.

The SEC, however, wants the PSE to sell more shares to investors to fully comply with the securities law. Despite the sale of 40 percent to institutional groups, the PSE is still majority-owned by brokers.