THE Philippine Stock Exchange, Inc. secured the go-signal from the Securities and Exchange Commission to proceed with its P3.16-billion stock rights offering (SRO) this February.
In an e-mail to reporters, the country’s corporate regulator said it has approved the PSE’s registration for the sale of up to 11.5 million shares priced at P275 apiece.
The PSE expects to raise P3.12 billion in net proceeds from the offer. Of the amount, the PSE said 51% or P1.58 billion will “(service) future corporate debt accessed through bridge financing” for its acquisition of Philippine Dealing System Holdings Corp. (PDSHC).
The PSE has already taken term loan facilities from BDO Unibank, Inc., Bank of Commerce, Metropolitan Bank and Trust Co. worth P1.15 billion, for the acquisition.
The SRO has been a necessary step in the PSE’s acquisition of PDSHC, as it will bring down broker ownership to less than 20%. Bringing down the ownership of trading participants in the local bourse is a key feature in securing the SEC’s approval for the merger.
SEC approval for the PSE-PDSHC merger is one of the final steps in closing the deal that began back in 2013, when the PSE proposed to merge the two markets for synergies in operations. To recall, the Philippine Competition Commission approved the merger last December 2017.
At the same time, the PSE said 29% of the net proceeds or P900 million will be used for product development, as the PSE looks to introduce new products until 2020.
In the first quarter of 2018, the PSE will launch corporate bonds and name-on-central-depository facility, as well as allow short-selling.
By the fourth quarter, the market will see the launch of structured warrants and securities lending transactions.
In the next four years, the PSE is planning to introduce project bond financing, commodities trading, fixed income and foreign exchange derivatives, and equity derivatives.
The SEC, however, noted that commodities trading, fixed income and foreign exchange derivatives, and equity derivatives are still outside the current authority of the PSE.
The remaining proceeds from the SRO, or P636.9 million will be used for working capital requirements, as the PSE moves to its new headquarters in Bonifacio Global City, Taguig by the first quarter of 2018.
Shares in PSE shed a peso or 0.41% to close at P240 each on Thursday. — Arra B. Francia
