ICTSI creates new preferred shares to boost foreign ownership

Port operator International Container Terminal Services Inc. (ICTSI) has approved the creation of a class of voting and low par value preferred shares to boost foreign ownership.

In a disclosure to the Philippine Stock Exchange, ICTSI said the move is intended to address the problem of the ceiling on foreign shareholdings, restricting the active trading by foreign investors of ICTSI’s shares.

“The establishment of similar voting and low par value preferred shares has been used by other listed companies in the Philippine Stock Exchange to increase the effective participation of foreign investors in their listed common shares, without affecting the beneficial ownership and economic interest of their existing shareholders,” ICTSI said.

ICTSI’s board approved the amendment of the company’s articles of incorporation to reclassify the existing authorized one billion preferred shares with a par value of P1 per share into 993 million preferred A shares and 700 million preferred B shares.

The preferred B shares shall be voting and shall be issued only to Philippine nationals. They are not convertible into common shares and will enjoy dividend rights as the board of directors shall provide which shall not exceed 10 percent of its par value.

The preferred B shares shall be redeemable at the option of the board of directors. Shares that are redeemed shall not be retired but shall be available for reissuance.

These proposed actions will be submitted for approval of ICTSI’s stockholders in a special meeting to be held on Aug. 11, 2010.

ICTSI recently raised $250 million from the sale of 10-year bonds, proceeds of which would be used to fund investments in existing and new terminal construction activities, refinance some of existing debts and for other general corporate purposes.

The bond issue was handled by HSBC and JP Morgan Securities.

In December last year, ICTSI obtained a $100-million, five-year term loan with Banco De Oro, of which only $25 million was drawn for general corporate purposes.

ICTSI is engaged in the management, operation and development of container terminals. The company and its subsidiaries provide cargo handling and related services to container, storage facilities and services, and roll-on roll-off (Ro-Ro) and anchorage services to non-containerized cargo or general cargo.

Locally, ICSTI operates the Manila International Container Terminal Inc., Mindanao Container Terminal in Misamis Oriental, the Makar Wharf in General Santos, the Cubi Point at the Subic Bay Freeport Zone in Zambales and Sasa International Port in Davao City.

Apart from the Philippines, ICTSI operates in Brazil, Ecuador and Madagascar. It manages the Pulau Muara Container Terminal in Brunei, Port of La Plata in Argentina, Port of Batumi in Georgia, Port of Buenaventura in Colombia, Port of Guayaquil in Ecuador, Yantai Port in Shandong province, China, Tartous Container Terminal in Syria, and the Makassar Port Container Terminal in Indonesia.

It recently bagged its first port project in the United States, with the signing of a 25-year lease with the Port of Portland for the container and breakbulk facility at Terminal 6.