PSE selling R2.8 B shares to public

The Philippine Stock Exchange is planning to raise R2.84 billion from the sale of new shares to fund its acquisition of the fixed income bourse and to dilute the stake of stock brokers closer to the 20 percent ownership cap.

In a disclosure, the PSE said its Board of Directors authorized the issuance of 11.5 million common shares out of the unissued portion of bourse’s authorized capital stock to be offered to the public.

It noted that, “details of the offering have not been finalized. 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.”

The PSE added that, “the proceeds of the offering will be used to fund the acquisition of PDS (Philippine Dealing System) and working capital requirements of the Exchange.” PSE shares were trading at R247 apiece yesterday.

The PSE’s non-compliance with the maximum ownership rule of 20 percent per industry is one of the major obstacles in its plan to acquire and merge with PDS.

The 11.5 million shares to be sold to the public is equivalent to 13.55 percent of the PSE’s outstanding capital after the offering.

However, since brokers’ cumulative stake in the PSE was last reported at 27.9 percent, the resulting dilution will bring their interest down to only 24.11 percent — still shy of the 20 percent target.

Newly-elected PSE President Ramon S. Monzon said earlier that “what we are actually asking from the SEC is for exemptive relief,” said Monzon explaining that they need to be exempted from the 20 percent ownership cap for the fixed income exchange.