Corporate News

PLDT insists there’s no need for Smart to go public

Posted on March 07, 2017

PLDT, Inc. on Monday insisted there is no need for its mobile unit Smart Communications, Inc. to list on the stock exchange, saying this has been long fulfilled.

This comes as the Senate’s version of Smart’s legislative franchise extension includes the initial public offering (IPO) requirement.

“Our position regarding this listing obligation contained in the original Smart franchise has been consistent... that the listing obligation has been complied with when PLDT, Inc., a listed company with a public float of over 50%, acquired 100% of Smart Communications in March 2000,” PLDT told the stock exchange.

“As such, Smart is effectively owned by PLDT shareholders.”

Senator Grace Poe, chairman of the public services committee, endorsed the measure extending Smart’s legislative franchise by another 25 years for plenary approval on March 1.

The Senate committee chose to retain the provision under Smart’s original franchise that required the company to make a public offering of at least 30% of its authorized capital stock in any securities exchange in the country within two years from its effectivity.

During the committee hearings conducted in the Senate, the Philippine Competition Commission (PCC) noted the need to require Smart to list on the stock exchange, “since it is not under the same stringent scrutiny” as its listed rival Ayala-led Globe Telecom, Inc.

House Bill 4637, which was approved by the House of Representatives and forwarded to the Senate, had exempted Smart from the IPO requirement since it is wholly owned by a publicly listed company, PLDT.

“During the hearings, we have emphatically conveyed to the Securities and Exchange Commission the sense of the Senate that it must enforce this provision of the law and that any failure on the part of the grantee to comply must be penalized,” Ms. Poe said in her speech when she endorsed the bill to the plenary last week.

For its part, PLDT said on Monday that it is already complying with the disclosure requirements.

“As to the matter of transparency and disclosure, resulting from a public listing, PLDT noted that Smart, being the largest business within the PLDT group, its operating and financial highlights are extensively discussed and disclosed in PLDT’s filings with the PSE,” the telco firm said on Monday.

PLDT and Smart Chief Corporate Services Officer Ray C. Espinosa during previous hearings already said on the public ownership requirement, “it’s already fulfilled” since PLDT is already publicly owned.

Congress has a little over two weeks to approve Smart’s legislative franchise, which expires on March 27. The Senate targets to pass the measure before it adjourns its current session on March 17.

Upon approval in the Senate, both Houses of Congress will meet in a bicameral meeting to harmonize the versions, unless congressmen decide to adopt the Senate version.

Majority Floor Leader Vicente C. Sotto suspended consideration of Smart’s legislative franchise last week to give time to other members of the Senate to study the amendments.

Smart failed to have its franchise extended in the previous Congress as the Senate deferred the adoption of the bill from the House of Representatives due to questions from some lawmakers, particularly the “standing objection” of Mr. Sotto, who was Deputy Minority Leader at that time.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. -- Imee Charlee C. Delavin