PSE lifts suspension of trading in Music Semiconductors shares

The Philippine Stock Exchange (PSE) lifted yesterday the trading suspension on the shares of Music Semiconductors Corp.

The suspension was imposed by the PSE last May 21 when stock transactions involving Music proceeded without reckoning of the necessity of a price adjustment and the adjustment in the number of shares as a result of the company’s quasi-reorganization.

Under the quasi-reorganization implemented by the company, shares of Music had been reduced from 446.69 million to 89.34 million shares.

According to the PSE’s Floor Trading and Arbitration Committee, there should have been a price adjustment but there was an inadvertent failure to do so. Music was last transacted at P0.37 on Jan. 26, 2004. As a consequence, transactions effected last May 21 were done at P0.55.

If mechanically adjusted, the price would be P1.84. Shares of Music closed at P1.85 per share yesterday.

To allow the market to reasonably determine the value of Music shares, the PSE lifted the trading band of 50-percent ceiling price and 40-percent floor price.

Due to technical limitations, the PSE’s Maktrade system will display the ceiling and floor values at P100 and P.0002, respectively.

The quasi-reorganization was in line with Music’s plan to absorb the operations of wholly-owned subsidiary Music Semiconductors Phils. Inc. (MSPI) and reduce its capital deficiency.

Music expects to trim its capital deficiency to P32 million by end-June this year with profits projected to reach P70 million for the period Oct. 2003 to June 2004.

In spite of this, management remains extremely cautious due to the continuing lack of visibility in the market, evidenced by customers’ unwillingness to place longer term purchase orders.

The company is undertaking a number of fund-raising activities as part of efforts to return to capital surplus by June 2004. Unicapital Inc. was tapped as financial adviser for its planned capital-raising activities.

Music plans to raise between P60 million and P90 million in additional capital from the issuance of new shares to fund product engineering and development.

Music was formerly Music Semiconductors Corp. (whose name is an acronym for Multi User Specialty Integrated Circuits), incorporated in the Philippines in Jan. 1992 as a subsidiary of its Dutch parent Music NV.

It is an investment holding company specializing in identifying key "early state" companies in the networking infrastructure, telecommunications and Internet markets and developing them into mature investments in these communication industry segments.