PAL, NXT, PHC, PEC face stock delisting

James Ryan Jonas

Four (4) publicly-listed companies are in danger of being delisted from the Philippine Stock Exchange (PSE) if they fail to comply with the public float requirement before the end of this month.

The four companies are PAL Holdings (PAL), Nextstage Inc. (NXT), Philcomsat Holdings Corp. (PHC), and PNOC-Exploration Corp. (PEC).

As per the minimum public ownership (MPO) requirement implemented by the PSE in 2012, all publicly-listed companies must maintain at least 10% of its outstanding stock in the hands of the general public. The new rule is meant to ensure that PSE-traded companies are indeed “public” and not controlled by a single bloc or a few controlling shareholders.

In June 2012, the PSE announced that 27 companies, including San Miguel Brewery (SMB), Alaska Milk Corp. (AMC), Eton Properties Inc. (Eton), and First Metro Investment Corporation (FMIC), were in violation of the public float rule.

Companies were given until the end of 2012 to raise their public float to the minimum 10%, and those who were not able to comply had the trading of their shares suspended effective January 2013. The PSE gave companies still in violation of the MPO rule until June 30, 2103 to comply and if these firms won’t meet the 10% public float, their suspended shares will be fully delisted from the exchange starting July 1.

Thus, the four remaining firms have around two weeks left before the end of the month to issue shares to the public in order to raise their public ownership percentage. At present, the public float of these companies are:

  • Philcomsat Holdings Corp. (PHC): 9.60%
  • Nextstage Inc. (NXT): 1.20%
  • PAL Holdings (PAL): 0.55%
  • PNOC-Exploration Corp. (PEC): 0.21%

PHC stocks have been suspended since May 3, 2007 and NXT shares suspended since May 16, 2008 for failure to comply with the PSE”s continuing listing requirements.

Philcomsat Holdings, Nextstage, and PAL Holdings signified via company disclosures their intent to comply with the minimum public ownership rule before July 1. PNOC-EC, however, has announced it is considering the possibility of delisting shares from the PSE.

Today, June 13, Southeast Asia Cement Holdings (CMT) will resume trading after the PSE lifted the suspension which became effective early this year. Prior to June 5, Seacem (CMT) only had 2.41% public float. On June 5, Seacem (CMT) signed two separate subscription agreements for the issuance of more than 554 million shares to new subscribers. This raised the company’s public float to 10.13%.

James Ryan Jonas teaches business management, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.2 Billion ($56.4 Million) worth of retirement funds on behalf of thousands of UP employees.