ABS-CBN’s 1B preferred shares only for insiders?
Credit to Author: Emeterio SD. Perez| Date: Tue, 28 Jan 2020 16:26:24 +0000
ABS-CBN Corp. lists on the Philippine Stock Exchange (PSE) 861,971,968 outstanding shares; 872,122,352 listed shares; and 883,294,529 issued shares. It has free-float level equivalent to 42.77 percent of outstanding. Being a television and radio station, it does not allow foreigners to own any of its shares, which is the reason for the entry’s zero percent.
As ABS-CBN so said in the PSE website, the company confirms in its public ownership report (POR) as of Dec. 31, 2019 the number of its outstanding shares but shows 21,322,561 treasury shares out of 883,294,529 issued shares. The TV channel and radio station also showed its entry of 21,322,561 treasury shares in its unaudited third quarterly financial statement.
In the same quarterly filing, Footnote 22 detailed ABS-CBN’s two entries by adding them – 21,322,561 treasury shares plus 27,828,645 PDRs convertible to common shares equals 49,151,206. Simplified, PDRs stand for Philippine Depositary Receipts while the total refers to the conversion of 21,322,561 treasury shares and of 27,828,645 shares into ABS-CBN common shares.
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To explain the conversion, here is what ABS-CBN said in Footnote 22: “PDRs convertible to common shares represents ABS-CBN Holdings PDRs held by the Parent Company, which are convertible into ABS-CBN shares.
“Each PDR grants the holders, upon payment of the exercise price and subject to certain other conditions, the delivery of one ABS-CBN share or the sale of and delivery of the proceeds of such sale of one ABS-CBN share. The ABS-CBN shares are still subject to ownership restrictions on shares of corporations engaged in mass media and ABS-CBN may reject the transfer of shares to persons other than Philippine nationals.
“The PDRs were listed in the PSE on Oct. 7, 1999 and may be exercised at any time from said date. Any cash dividends or other cash distributions in respect of the underlying ABS-CBN shares shall be applied by ABS-CBN Holdings, issuer of PDRs, towards payment of operating expenses and any amounts remaining shall be distributed pro-rata among outstanding PDR holders.”
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As of Dec. 31, 2019, ABS-CBN listed the public as holders of 367,185,008 common shares, then equivalent to 42.60 percent of 861,971,968 outstanding shares, according to the POR.
The publicly owned ABS-CBN shares included ABS-CBN Holdings’ directly owned 306,806,300 shares, which when subtracted from total public ownership would be equal to 60,378,708 shares, which would be equivalent to 7.005 percent of outstanding.
By deducting more from 60,378,708 publicly owned ABS-CBN shares, the number could still dwindle. How about subtracting 1,815,711 ABS-CBN shares from the remaining publicly owned shares? The difference would be 58,562,997 shares. The list of deductions could go on in such a way that the final count would leave a few shares to the public like ABS-CBN shares directly owned by 25 executives who directly held 1,608,242 as of Dec. 31, 2019.
By the way, the POR listed two principal stockholders. Aside from ABS-CBN Holdings, it also showed Lopez Inc. as direct holder of 480,933,747 ABS-CBN shares. ABS-CBN Foundation Inc., which the POR described as an affiliate, was a direct stockholder with 780,995 ABS-CBN shares.
By deducting a total of 12,200,625 ABS-CBN shares from publicly held 60,378,708, the public would be left with 48,178,083 shares, which would be equivalent to 5.589 percent, which would be less than 10 percent of 861,971,968 outstanding ABS-CBN shares.
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A general information sheet (GIS) for 2019 showed 1.3 billion common shares with par value of P1 per share and 1 billion preferred shares with par value of P0.20 per share as ABS-CBN’s authorized capital stock for a total 2.3 billion shares of which 1,883,294,529 shares, or 81.882 percent, was fully paid.
Of the 1 billion preferred shares, Lopez Inc. subscribed and paid for 987,130,246 ABS-CBN preferred shares, or 98.71 percent, for which the company paid P197,426,049.20, which was at P0.20 each. Tower Securities Inc. held 4,431,583 preferred shares, or 0.44 percent; Citibank NA for the account of ATR Kim Eng Capital Partners Inc., 2,244,787 preferred shares, or 0.22 percent; Manuel M. Lopez and/or Ma. Teresa L. Lopez, 1,643,032 preferred shares, or 0.16 percent; Abacus Securities Corp., two blocs of 727,085 preferred shares and 699,091 preferred shares, or 0.07 percent; Value Quest Securities Corp., 662,020 preferred shares; Gloralinks Securities and Stocks Inc., 297,081 preferred shares; Manuel M. Lopez, 187,518 preferred shares; Maybank ATR Kim Eng Securities Inc., 182,083 preferred shares; Belson Securities Inc., 128,905 preferred shares; Asiasec Equities Inc., 120,000 preferred shares; PCCI Securities Corp., 112,022 preferred shares; Rick See Eng Huy, 103,901 preferred shares; Noli de Castro, 93,372 preferred shares; Meridian Securities Inc., 93,133 preferred shares; Edmond T. Aguilar, 71,961 preferred shares; Leonardo P. Katigbak, 66,702 preferred shares; Kris Aquino, 66,136 preferred shares; and Imperial, De Guzman, Abalos & Co., 56,641 preferred shares. ABS-CBN defined under “others” holders of 884,701 ABS-CBN preferred shares but did not state the number.
ABS-CBN has only 883,294,529 common shares, which it priced at P1 each. Why only 21 including “others” paid for 1 billion ABS-CBN preferred shares? Was the price too low for insiders? What about the public investors who made publicly traded this TV channel and radio station? Just asking.
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