In a move to fend off any potential moves by hostile investors looking to gain control of a company, Benpres Holdings Corp. signed yesterday a voting trust agreement with Lopez Inc. covering the former’s 254.12 million shares in First Philippine Holdings Corp. (FPHC).
A voting trust is a trust whereby the shares in a company of one or more shareholders and the voting rights attached thereto are legally transferred to a trustee, usually for a specified period of time. In some voting trusts, the trustee may also be granted additional powers (such as to sell or redeem the shares).
Taking its cue from past experience which put the Lopez Group and the Governmnent Services Insurance System at loggerheads over power utility giant Manila Electric Co., Benpres has moved to protect its shares in FPHC.
“Benpres deems it beneficial to appoint Lopez Inc. as its voting trustee with respect to its FPHC shares to protect legitimate creditors and shareholders of Benpres and FPHC against groups with hostile or inimical interests that would act against creating or furthering shareholder values,” Benpres said in a disclosure to the Philippine Stock Exchange.
Shareholders execute a voting trust agreement to safeguard control of a company.
From its 52-week high of P79 per share, FPHC is now down to P16 as of Thursday. Benpres, on the other hand, has fallen to P1 from a 52-week high of P4.85.
Benpres owns 46 percent of First Philippine Holdings Corp. while Lopez Inc. holds a 54.61-percent stake in Benpres.
FPHC is a holding company whose core businesses are power and infrastructure, with strategic initiatives in manufacturing and property.
Its power generation subsidiary, First Gen Corp., is now the largest vertically-integrated power generation company in the Philippines with an installed capacity of 2,582 megawatts, accounting for approximately 16 percent of total installed capacity in the country today.
Its power distribution associate, Manila Electric Co., has a franchise area producing 50 percent of the country’s gross domestic product (GDP) and servicing 60 percent (about four million customers) of the electricity.