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PT&T’s P9.1-B capital increase

HOUSE of Investments Inc. (HI) has authorized capital stock of 3.75 billion shares consisting of 1.25 billion common share with par value of P1.50 per share, and 2.5 billion preferred shares with par value of P0.40 per share.

In its latest general information sheet (GIS), which it filed after its annual stockholders’ meeting on July 20, 2018, HI reported having 438 stockholders who subscribed to and paid for 1.191 billion shares.

The paid-up and subscribed capital, according to the same GIS posted on the website of the Philippine Stock Exchange (PSE), was equivalent to P1.171 billion.

Of the Filipino investor subscribers, 379 paid for 572.788 million common shares or 92.986 percent. In the same posting, 48 Filipinos were reported to have subscribed and paid for 618.535 million preferred shares which represent HI’s entire preferred shares.

Of HI’s 1.191 billion paid-up shares, 11 foreigners subscribed and paid for 43.209 million common shares or P64.813 million computed at par value of P1.50 per share.

In the same GIS, House of Investments said as of cut-off date, it had 300,000 treasury shares which it classified as all common.

At the stock’s market price of P6.19 per common share, the company’s treasury shares had market value of P1.857 million.

House of Investments is the holding company of the Yuchengo family who also owns Pan Malayan Management & Investment Corp., HI’s biggest stockholder.

As of Aug. 15, 2018, Pan Malayan owned 294.76 million HI common shares or 47.85 percent.

PCD Nominee Corp. held for Filipinos 231.596 million HI common shares or 37.60 percent and for foreigners, 41.947 million HI common shares or 6.81 percent, respectively.

In addition to Pan Malayan’s holdings for the Yuchengco group, A.T. Yuchengco Inc. held 10.597 million HI common shares or 1.14 percent while Malayan Securities held 2.79 million HI common shares or 0.45 percent.

PT&T’s stockholders

Philippine Telegraph and Telephone Corp. (PT&T) has authorized capital stock of 1.73 billion shares divided into 1.5 billion common shares with par value of P1 per share and 230 million preferred shares with par value of P10 per share.

Of PT&T’s authorized capital stock, 1.491 billion common shares or 99.37 percent were subscribed and paid-up by 3,593 Filipino stockholders, according to the company’s GIS.

It had 31 foreign stockholders who held 9.473 million PT&T common shares or 0.63 percent.

PT&T listed in its GIS Menlo Capital Corp. as its largest stockholder with 560 million common shares or 37.33 percent. The others were Telectronics Systems Inc., 300 million common shares or 20 percent; Republic Telecommunications Holdings Inc., 278.874 million common shares or 18.59 percent.

As holder for beneficial stockholders, PCD Nominee held 149.922 million PT&T common shares or 9.99 percent for Filipinos and 7.485 million PT&T common shares, for non-Filipinos.

In a public ownership report (POR), PT&T listed two principal stockholders such as Menlo Capital and Republic Telecommunications with 560 million PT&T common shares or 37.33 percent, and 278.874 million PT&T common shares or 18.59 percent.

The two stockholders’ holdings totalling 838.874 million PT&T common shares were equivalent to 55.92 percent.

Telectronics Systems Inc., TIMCO Holdings Inc., Utilities Management Corp. and Waterous Medical Corp. were listed as affiliates with combined holdings of 421.315 million PT&T common shares or 28 percent.

As a result, PT&T’s public stockholders held 239.803 million common shares, or 15.98 percent.

Due Diligencer’s take

Of PT&T’s 1.5 billion outstanding common shares, only 800 million common shares are listed.

Of the company’s outstanding common shares, it said its free-float level was equivalent to 15.98 percent which was what PT&T reported in its POR.

Apparently, PT&T is not satisfied with its present authorized capital stock that it said in an information statement that it would seek the approval by its stockholders the increase in its authorized capital stock to 15.6 billion shares from 1.73 billion shares.

As planned by management, PT&T would issue out of the capital expansion three million additional common shares at P1 per share; 6.75 billion Series ‘A’ Serial Cumulative Convertible Redeemable Preferred shares at P1 per share; 1.8 billion Series B serial cumulative preferred shares at P1 per share; and 250 million Series ‘C’ Serial Cumulative Convertible Redeemable Preferred shares at P1 per share.

This means, by issuing all these shares, PT&T would be able to raise P9.1 billion.

In justifying the capital increase and issuance of additional shares, PT&T said this would “enable the company to pay its outstanding obligations through equity restructuring to raise funds in the form of equity offering with a view of using the proceeds of such funds to fund growth and expansion, general corporate purposes and/or for such other purposes to be determined by the board.”

If trading on PT&T’s common shares remains suspended, how can the company possibly engage in P9.1-billion capital-raising exercise? Just asking.


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