PSE asks for full, comprehensive disclosure to lift trading suspension

By Denise A. Valdez, Senior Reporter

THE Philippine Stock Exchange, Inc. (PSE) will not lift the trading suspension on shares of Xurpas, Inc. after deciding that its planned P170.7-million acquisition of venture capital firm Wavemaker Partners US qualifies as a backdoor listing.

In a notice on its website, the bourse operator said backdoor listing rules will apply to the company’s planned issuance of 1.71 billion common shares to Wavemaker US, and as such, has required more documents from the company.

Until such compliance, it decided to keep the trading suspension on the company’s shares, which has been in place since Sept. 18.

“After a careful review of the company’s submissions and disclosures, the exchange deems that the foregoing transactions are covered by the exchange’s Rules on Backdoor Listing,” it said.

“Said determination is anchored on the series of transactions effectively resulting to an acquisition by a listed company (i.e., Xurpas) of an unlisted company (i.e., Wavemaker Group and its related entities) and the purchase by the Wavemaker Partners of Xurpas shares resulting to a substantial change in Xurpas’ voting structure, among others,” it added.

Xurpas is planning to issue common shares amounting to 47.68% of its outstanding shares to Wavemaker US, represented by Frederick Manlunas, Benjamin Paul Bustamante Santos, James Buckly Jordan, Wavemaker Partners V, LP and Wavemaker US Fund Holdings, LLC. The shares are priced at 10 centavos each.

After this transaction, Xurpas will buy 100% of Wavemaker Group, Inc., which has interests in Siemer Ventures, LLC; Wavemaker Partners, LLC; WMP GP V, LLC; Wavemaker Global Select, LLC; and Wavemaker Management, LLC.

It said it would get some P170 million in cash from the issuance of shares to Wavemaker US, which it will use to buy Wavemaker Group.

“It is in this regard that the exchange is constrained from lifting the trading suspension on the company’s shares until the required information have been submitted and due compliance with the applicable laws, rules and regulations has been established,” the PSE said.

Xurpas is required to submit a full and comprehensive disclosure to the regulator, including relevant documents that would detail the business impact and material implications of the transaction.

In an e-mail to BusinessWorld, which was disclosed to the PSE website on Monday, Xurpas said it would “comply with the exchange’s findings to ensure that the public will have access to full, fair, timely, and accurate information.”

“The company is currently preparing the comprehensive corporate disclosure for backdoor listing and will be submitted to the exchange once available,” it added.

Xurpas had previously planned to complete the acquisition of Wavemaker no later than Dec. 31, 2020.

“This acquisition significantly expands Xurpas’ technology base and gives Filipino shareholders and investors access to an entire portfolio of promising venture-backed early-stage companies in the US,” Xurpas Chairman Nico Jose S. Nolledo said in a statement in September.

Xurpas recorded an attributable net loss of P43.75 million in the first half of 2020, down from P118.28 million in the same period last year. Its shares closed at 55 centavos apiece on its last trading day on Sept. 18.