SEC okays changes in Itogon-Suyoc papers

The Securities and Exchange Commission (SEC) has approved the changes in the incorporation papers of Itogon-Suyoc Mines Inc. (ISMI) to clear the way for the entry of Internet firm Philweb.com into the company and its subsequent shift into information technology.

The amendments to ISMI’s articles of incorporation will cover:

1. The declassification of shares of stock (common ‘A’ and ‘B’) into one class of common share;

2. The denial of the pre-emptive rights of ISMI stockholders; and

3. The inclusion in the list of secondary purposes the business of information technology, telecommunication and other similar businesses.

These changes were approved by both the board of directors and stockholders of ISMI in June and July 2001, respectively, but were not acted upon due to the firm’s request to exempt it from the exchange’s additional rules on listing, which the PSE declined.

The rule requires companies to first undertake a right or public offering before the PSE approves the listing of additional shares subscribed through private placement, debt-to-equity conversion, share-for-share or property-for-share swap, or similar transactions.

The PSE said this rule would protect the minority shareholders in the event there would be a significant demand for shares from existing stockholders, particularly if the new shares will be priced at more than 10-percent discount from the market price or at book value, whichever is higher.

But the SEC, in a March 25 order, upheld an earlier ruling that exempted ISMI from the rights offer, citing the company’s situation as "moribund" wherein no underwriter would be willing to assume the risks of a rights offer, on top of the badly-needed additional investments and capital infusion to resurrect its operations.

On July 2, 2001, ISMI and Philweb struck a deal that would transform the former into an IT company under the management of Philweb. As payment for its services, ISMI agreed to let Philweb buy 40 percent of the company for P120 million through a private placement at a discounted price of P0.01 per share.

The PSE said the declassification of ISMI shares will not yet be reflected in the exchange’s computer system pending further disclosure from the company on the procedures of updating the stock certificates to reflect the same.

ISMI has exactly 8,344,799,963 common ‘A’ shares and 9,655,131,747 common ‘B’ shares listed at the PSE. At the close of yesterday’s trading, the price of ISMI ‘A’ was up half a centavo to five centavos while IMSI ‘B’ also stood at five centavos, higher by one centavo.