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SEC approves Ayala Corp.'s reverse stock split
Posted: 10:33 AM | May 24, 2005
THE SECURITIES and Exchange Commission (SEC) has approved Ayala Corp.'s one-for-50 reverse stock split and an increase in the par value of its shares from 1.00 peso to 50 pesos.
The move is intended to align Ayala Corp.'s stock price to trading levels more comparable with large-cap listed conglomerates, the company earlier said.
In a disclosure to the stock exchange, Ayala Corp. said it would soon release a guideline to stockholders.
Separately, the stock exchange said the change in par value and the corresponding adjustment in the price and number of Ayala Corp.'s outstanding shares would not yet be reflected on the exchange's computer system pending the company's disclosure of its procedure for updating old stock certificates bearing the new par value.
Last December, the conglomerate said its total number of shares would be reduced to 380 million from 17 billion by the reverse stock split.
It said the share consolidation would have the effect of increasing Ayala Corp.'s stock price by a factor of 50.
Vol. XVIII, No. 215
Thursday, May 26, 2005 | MANILA, PHILIPPINES
Ayala Corp. stock split changes seen Monday
The adjustments in the price and number of outstanding shares of Ayala Corp. will be reflected on the Philippine Stock Exchange’s (PSE) electronic board and ticker on Monday, the listed firm yesterday said.
In a disclosure, Ayala Corp. said the effectivity date of the reverse stock split will be on May 30. Common shares traded prior to this date will still be denominated on the basis of the old par value of P1 per share.
The stock split allows the firm to increase the number of shares that are outstanding by issuing more shares to current shareholders.
A stock split is usually done by companies that have seen their share price increase to levels that are either too high or are beyond the price levels of similar companies in their industry. This is to make shares seem to be more affordable to small investors even though the underlying value of the company has not changed.
"As of the effectivity date, the number of common shares of the company’s stockholders shall be reduced base on one for every 50 common shares held, and the par value shall be adjusted to P50 per share. The basis of the opening at the PSE for each common share on the effectivity date will be the closing market price at the PSE of the common shares on May 27 multiplied by P50," the firm said.
The Securities and Exchange Commission has approved the reverse stock split and the change of its amended articles of incorporation.
Ayala Corp. said old stock certificates of the common shares may still be traded at the PSE up to three months from May 30.
"During this three-month period, the stockholders of the company are encouraged to cause the replacement of their old stock certificates with the new stock certficates even if they do not intend to trade the shares yet. Thereafter, the old certificates will no longer be allowed to be traded unless these are first surrendered to BPI stock transfer office and stamped with new par value, or replace with new certificates.
Alternatively, stockholders may surrender their old stock certificates to their respective stockbrokers prior to trading so that the proper stamping can be coordinated with BPI stock transfer office," the letter read.
The resulting fractional shares will be consolidated into the whole shares and redeemed by the company as treasury stock.
"As approved by the stockholders, the company will pay cash to the stockholders for their respective fractional shares as of the effectivity date based on the closing market price of the common shares on April 7, 2005 which was P7.30 per share," Ayala Corp. said. -- Ruby Anne M. Rubio
Abigail L. Ho
Inquirer News Service
WANTING to diversify its interests further, the Ayala group is looking at some assets of National Power Corp. (Napocor) that are to be privatized, Ayala Corp. treasurer and chief financial officer Delfin Lazaro said.
The power sector has become of particular interest to the group because of its scale, said Lazaro, a former secretary of energy.
Private assets in the power sector, such as Manila Electric Co. (Meralco), are not in the group's radar, he said.
"We are looking at government energy assets scheduled to be privatized, not Meralco," he told the Inquirer. "Ayala has not arrived at any concrete decisions, even the decision to bid for any particular asset. We have simply included energy as one area to consider in our plans to grow the business.''
Ayala, the oldest business in the country, is in real estate and hotels, banking and finance, telecommunications, water distribution, electronics, and insurance, among others.
Power Sector Assets and Liabilities Management Corp. (PSALM), the agency handling the privatization of power assets, is selling power production and distribution facilities. It has so far sold five hydroelectric and one coal-fired plant, and is working on auctioning the 25-year concession agreement for National Transmission Corp., which has taken over the Napocor transmission assets in preparation for privatization.
The Ayala group is also monitoring developments in the yet-to-be-implemented wholesale electricity spot market to prepare for possible implications on its overall business in the event it enters the power sector.
Ayala Corp., the group's holding company, registered a consolidated net income of P2.55 billion in the January-March quarter, triple the profit it registered in the same period last year.
It attributed the strong performance to substantial contributions of key subsidiaries Globe Telecom Inc., Ayala Land Inc., and Bank of the Philippine Islands. With INQ7.net
If AC is one of the main barometers in this market... it makes things look scary. Haven't had any stock in a long while. Lucky to have sold all in the upswing including my MUSX.
I am still hesitant to jump back in given the current political situation. The smoke has not even started therefore nothing still is evident regarding GMA. The worst is yet to come. Just be careful guys.
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