PSE to raise P1.15B for PH dealing system funding

MANILA, Philippines – The Philippine Stock Exchange (PSE) is raising P1.15 billion ($25.80 million) in debt to finance the acquisition of 100% interest in Philippine Dealing System Holdings Corporation (PDS).

In a disclosure, PSE said its board authorized the exchange to take out a 5-year loan from several banks to finance the purchase of shares of stock from the stockholders of PDS, the operator of the country’s markets for fixed-income securities and foreign exchange.

PSE president and chief executive officer Hans Sicat earlier said that the exchange is already close to getting 74% interest in PDS since several shareholders have expressed interest in selling their shares to the local bourse.

Bankers Association of the Philippines, San Miguel Corporation, Golden Astra, Tata Consultancy Serves Asia, Computershare Technology Services, The Philippine America Life and General Insurance Company, Financial Executive Institute of the Philippines, Social Security System, and  Investment House Association of the Philippines are the PDS shareholders that have already expressed intention to sell their shares to PSE.

Singapore Stock Exchange, a PDS shareholder owning 20% interest, has yet to participate in the buyout offer.

After securing shareholders’ approval during its recent stockholders meeting, the PSE earlier this month sent offer sheet to buyout all PDS shareholders, in an aim to get super majority interest in the exchange operator for P2.25 billion ($50.43 million).

PSE already owns 20.8% interest in PDS prior to the buyout offer.

If all PDS shareholders agreed to tender their shares to PSE, the exchange will need roughly P1.8 billion ($40.34 million) to buyout all remaining PDS shareholders.

Deadline for PDS shareholders to agree to the buyout is on Friday, May 29.

PSE eyes to close the deal this July and obtain regulatory approval by August.

The buyout by PSE of PDS shareholders will pave the way for the merger of the equites and fixed-income exchanges.

PSE and PDS have been in talks for possible merger for several years now, but valuation concerns delayed the progress of this deal. – Rappler.com

$1 = P44.62