Terminated deal
Credit to Author: EMETERIO SD. PEREZ| Date: Thu, 11 Apr 2019 16:21:28 +0000
The disclosure was in the form of a letter addressed to the Securities and Exchange Commission (SEC), the Philippine Stock Exchange (PSE) and the Philippine Dealing System Corp. (PDSC). It was dated March 29, 2019 and the letter’s recipients were Vicente Graciano P. Felizmenio, director of the SEC’s market and securities regulation department; Janet Encarnacion, head of PSE’s disclosure department and Joseph B. Evangelista, head, of PSE’s issuer compliance and disclosure department.
The letter, the contents of which are self-explanatory, reads as follows:
“This refers to the Subscription Agreement dated 26 October 2018 as amended on 26 December 2018 (the “Agreement”) between PXP Energy Corporation (PXP) and Dennison Holdings Corp. (Dennison), under the terms of which PXP agreed to issue and Dennison agreed to subscribe to 340 million common shares of the Company for the total aggregate amount of Php4.029 billion or a Subscription Price of PhP11.85 per share, subject to other terms and conditions as provided for in the Agreement.
In relation to the subscription of Dennison to the PXP shares, PXP, through a Preferential Rights Agreement dated 26 October 2018, was granted certain Preferential Rights to the prospective shares of Dennison’s affiliate, Phoenix Petroleum Philippines, Inc. (the “Company” or Phoenix), in Tanglawan Philippine LNG, Inc.
We would like to disclose that on 29 March 2019, the PXP and Dennison mutually agreed to terminate the Share Subscription Agreement effective 29 March 2019 (the “Effective Date”).
As such, PXP also relinquished any and all Preferential Rights granted under the Preferential rights Agreement among the Company, PXP, and Dennison following the termination of the Share Subscription Agreement.
Thank you and warm regards.
Very truly yours,
Atty. Socorro Ermac Cabreros
Corporate Secretary”
Top executives
Domingo T. Uy is chairman of Phoenix Petroleum’s 11-person board while Dennis Uy, who is one of the regular directors, is president and chief executive officer.
As a listed company, Phoenix has 1,403,304,232 outstanding common shares and 20 million outstanding preferred shares.
Of Phoenix’s more than 1.403 billion outstanding common shares, Phoenix Petroleum Holdings Inc. owns 588,945,630 common shares, which represent 41.97 percent.
Phoenix’s computation did not include 20 million preferred shares.
Phoenix’s other stockholders included ES Consultancy Group Inc., 304.271 million, or 24.25 percent; Top Direct Investments Limited, 142 million, or 10.12 percent; and Udenna Corp., 117.246 million, or 8.35 percent.
PCD Nominee Corp. holds 138.606 million Phoenix common shares and 223.221 million Phoenix common shares as record stockholder for Filipinos and foreigners, respectively.
A public ownership report (POR) as of Dec. 31, 2018 listed three principal stockholders with combined ownership of 1.071 billion common shares, or 76.34 percent. These were Phoenix Petroleum Holdings, ES Consultancy and To Direct Investments with combined holdings of 1.071 billion common shares, or 76.34 percent.
The affiliates, as the same POR described three other stockholders in the POR, directly held 130.522 million Phoenix common shares, or 9.3 percent.
Minus all these and others such as those held by Phoenix’s executives, the company credited with ownership of 186.607 million common shares, or 13.30 percent, its public stockholders.
Compensation
As president and CEO, Dennis Uy is among Phoenix Petroleum’s five highest paid executives. The five-man group was to have been paid P52.972 million by Dec. 31, 2019. The total included salary, P48.898 million and bonus, P4.074 million.
Aside from Uy, the four other well-paid executives were Henry Albert Fadullon, chief operating officer; Ma. Concepcion de Claro, chief finance officer; Allan Raymond Zorilla, vice president-external affairs, business development and security; and William Azarcon, VP-business development for terminal and depots.
“All other officers and directors as a group unnamed” were to have been paid P87.060 million by Dec. 31, 2019. The amount was divided into salary, P80.363 million; and bonus, P6.697 million.
In 2018, Phoenix Petroleum paid the same five-person group P48.157 million divided into salary, P44.453 million, and bonus, P3.704 million. It paid “all other officers and directors as a group unnamed” salary of P73.057 million and bonus of P6.088 million for a total of P79.145 million.
In 2017, the same five-person group received P43.779 million divided into salary, P40.412 million, and bonus, P3.368 million. “All other officers and directors as a group unnamed” were paid salary of P25.452 million and bonus of P2.121 million, for a total of P27.573 million.
Due Diligencer’s take
As has been written, the contents of the disclosure made by Phoenix Petroleum were self-explanatory. However, some details could have been “lost” as the letter was being posted on the PSE website.
When Phoenix Petroleum mentioned “Preferential Rights,” it should have explained what it meant by the two-word-phrase. Why should the public care about preferential rights?
However, Phoenix’s public stockholders may be interested in knowing what the company meant by preferential rights. The public investors who are not Phoenix’s stockholders may be interested in learning what the company means when it tackles the words in its letter.
Being keen observers of daily trading taking place in the stock market, public investors know fully well that as outsiders, they are keen about listed stocks and when listed firms distribute dividends, either in cash or in stock. Otherwise, they remain as outsiders and simple observers of day-to-day trading session.
By the way, “public investors” and “public stockholders” are also self-explanatory. While the former refers to the general public at large, the latter means they are already owners of either a few or some common shares issued by listed companies.
Need I explain more what preferential rights could be all about? Just asking.
esdperez@gmail.com
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