PSE approves stock rights offering

THE PHILIPPINE Stock Exchange, Inc. (PSE) has canceled its previous plan of a public offering of up to 11.5 million shares in favor of a stock rights offering, as part of efforts to bring down broker ownership in the bourse.

In a disclosure on Thursday, the PSE said its board of directors approved the conduct of a stock rights offering under terms and conditions yet to be determined by the management.

“This issuance is part of the Company’s compliance plan to align the shareholder ownership with the limits set by the Securities and Regulation Code ( SRC),” the PSE said in its disclosure.

Bringing down broker ownership to 20% is one of the key features the PSE has to comply with to secure the Securities and Exchange Commission’s approval for its merger with the Philippine Dealing System Holdings Corp. (PDS).

Under Item C of Section 33.2 of the SRC, “no person may beneficially own or control, directly or indirectly, more than five percent (5%) of the voting rights of the Exchange and no industry or business group may beneficially own or control, directly or indirectly, more than twenty percent (20%) of the voting rights of the Exchange.”

Currently, trading participants hold a 27.9% stake in the PSE.

The PSE has been holding talks with the PDS and various regulatory boards since 2013 to make the merger of the equities and fixed income markets possible. The bourse has managed to increase its stake in the PDS to 57.0031% during this period.

The PSE will use proceeds of the issuance to fund the acquisition of PDS, as well as its capital expenditure requirements.

With a closing price of P240.80 on Thursday, the PSE could raise up to P2.77 billion from the issuance.

The PSE reported a 26% drop in its attributable profit to P220 million for the first half of 2017, amid an 18% increase in revenues to P662 million during the period. —