MPIC ups share value to attract US market

MANILA, Philippines – Infrastructure conglomerate Metro Pacific Investments Corp. (MPIC) plans to conduct a reversed stock split to make its shares more interesting to the American investors it is eyeing for a fund raising.  

MPIC chairman Manuel V Pangilinan said that the move will make the shares sold in the US more attractive. “It’s better to reverse it because we have too many shares — 26 billion. It’s better to have the number down and make the share prices more,” explained Pangilinan at a media briefing on Thursday, February 28. 

A reverse stock split means the number of shares is reduced such that the price and earnings per share will rise but the company’s market capitalization remains the same.

“If you convert the prices from pesos to dollars it would be less than one-US-cent. If you want our shares to be traded in the [United] States you have to bring the share price component and dividend component to a level the share prices can see,” he added.

According to MVP the reversed shares would be traded at 50-1. “The whole range of possibility of reversed split ratio was presented to the board this morning and they chose 50-1,” he said. 

This reversed split share is subject to stockholder approval in May.

MPIC has 25.96 billion outstanding shares, according to the Philippine Stock Exchange (PSE) data. With its shares closing at P5.20 on Thursday, MPIC’s market capitalization stood at P134.22 billion.

Fund raising

In August 2012, MPIC announced its plans to tap fresh funds from the US market through a maiden offering of American depositary receipts. (ADRs).

ADRs are negotiable certificates denominated in dollars issued by a bank in the United States that serve as a proxy to a specified number of shares in a foreign company that is traded on the stock exchange. Through this instrument, US based investors are able to acquire an interest in a foreign company while collecting dividends and capital gains in dollar denomination.

The first tranche of ADR was launched early August through appointed depository Deutsche Bank.

In a statement released to the Philippine Stock exchange, MPIC president and CEO Jose Ma. K. Lim said the program was “in line with the company’s thrust to broaden its investor base by making its stock available to the widest possible audience.” 

MPIC posted a 24% net income growth in 2012, thanks to the strong performance of its subsidiaries.

In a financial filing released to the Philippine Stock Exchange on Thursday, February 28, MPIC said the company’s core net income went up 28% to P6.5 billion from P5.1 billion, minus extraordinary charges.

In January, MVP announced that it had raised P6.12 billion to finance its entry in new businesses as well as the expansion of its toll road and water distribution units.

In a disclosure to the stock exchange, MPIC said it sold 1.33 billion common shares at P4.60 apiece via private placement. – Rappler.com