Philippine Stock Exchange orders delisting of Calata

THE PHILIPPINE Stock Exchange (PSE) on Tuesday ordered the delisting of Calata Corp., more than three months after it started involuntary delisting procedures on the firm.

The local bourse notified the investing public of its decision penned Nov. 3 in a memorandum issued yesterday.

“Following the conclusion of involuntary delisting proceeding involving the company, the exchange issued a decision dated Nov. 3 ordering the delisting of the company’s shares from the official registry of the exchange and the imposition of concomitant penalties under the exchange’s delisting rules,” the PSE said.

The bourse further ordered Calata to conduct a tender offer to its shareholders to give them the option of exiting the firm after it gets kicked out from the stock exchange.

In an earlier interview, Calata Chairman and Chief Executive Officer Joseph H. Calata said conducting a tender offer would be impossible as it would effectively kill the company. He cited the firm’s retained earnings of around P400 million would not be enough for the tender offer, estimated to cost more than P1 billion.

Calata’s public float currently stands at 61.53%.

The PSE suspended trading of shares in Calata last June, after it was found to have violated multiple disclosure rules on material information that may affect investor decision. This includes 29 violations of Section 13.1 of the PSE Disclosure Rules from Nov. 29, 2016 to June 20, 26 violations of Section 13.2 of the same rules from Oct. 6, 2016 to March 16 and from April 26 to May 2, as well as the black-out rule, which prohibits directors and principal officers of a company from trading shares during a prescribed period.

The bourse then initiated involuntary delisting procedures on July 24 on account of the violations.

The exact date for the delisting has yet to be set.

“The Exchange will notify the investing public of further developments on the said tender offer and shall issue a separate announcement on the effective date of delisting,” the PSE said.

Involuntary delisting is one of the heaviest penalties imposed by the bourse, given that the company is not allowed to re-list within the next five years, while directors and officers are disqualified from holding positions in a company applying to list.

Amid the delisting, Mr. Calata announced his plan of listing Calata shares on the global cryptocurrency exchange as CalCoins. This would be traded along with other virtual currencies such as bitcoin and ethereum.

In a press conference last week, however, some minority shareholders said they disapprove of the plan, noting that the option would be for Mr. Calata to either buyback their shares, or for them to find an investor that would buy out Mr. Calata from the company.