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SEC approves PSE move to slash broker ownership.

THE Securities and Exchange Commission (SEC) on Thursday has approved the Philippine Stock Exchange Inc.'s (PSE) stock-rights offer, a move meant to bring down the brokers' ownership to 20 percent.

The PSE is offering 11.5 million common shares at P275 per share, for total proceeds of about P3.12 billion.

The PSE said some P1.58 billion will be used to fund its acquisition of PDS Holdings Corp.; some P900 million for product development, and P636.9 million will be for working capital requirements.

'The company intends to utilize its existing credit facilities to finance its acquisition of PDSHC, which is expected to be completed in the first quarter of 2018,' the PSE said in its registration statement.

The PSE's stock-rights offer is aimed at diluting the combined ownership of brokers to pull it down to 20 percent, from the current 23 percent. The said number of ownership is required to bring down the ownership of brokers in the PSE for it to get the SEC's nod on its planned acquisition of PDS Holdings, the owner of the fixed income exchange.

'In our computation, with the 11.5 million shares that we will be offering, we believe that the final ownership of the brokers of the PSE will be a little less than 20 percent.

'Since we filed a registration statement with the SECso there can be no doubt about the compliance plan,' PSE President and CEO Ramon Monzon earlier said. 'So, hopefully, it just involves a little more dialogue, a little more explanation and, if we are successful in doing that, before the end of the year, hopefully we can get the relief from the SEC.'

He estimated that it will take the SEC about a month to six weeks to review the PSE's registration statement, and the PSE and its underwriters are planning to start the book-building process by January and are looking at listing the new shares by February. The SEC in March last year thumbed down the request of the PSE to merge with PDS, or short for Philippine Dealing System. 'The larger fear here is that the PSE does not appear to fully appreciate the central importance of the fixed income market in financial intermediation and does not have a concrete plan on how to develop and manage such a market going forward,' the SEC said in its decision in 2015.

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Publication:Business Mirror (Makati City, Philippines)
Date:Jan 18, 2018
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