PSE steps up effort to convince big, profitable firms to go public

The Philippine Stock Exchange (PSE) and the government are intensifying efforts to convince big profitable companies to push through with their initial public offering (IPO) to boost investor confidence in the market.

The PSE said a number of companies have already signified their interest to list in the exchange due to the political stability ushered in by having a President with a full six-year term.

The government, for its part, is targeting companies that are required by law to list at the stockmarket.

For one, the Department of Energy is wooing a number of oil players to open up their ownership to the public to perk up liquidity of the stockmarket. Among these companies are major oil firms Pilipinas Shell Petroleum Corp. and Caltex Philippines, Mirant Philippines Corp. Mirant Global Corp., and First Generation Holdings Corp.

Shell and Caltex are both mandated by law to undertake a public offering of shares but have continued to delay the listing of their shares citing weak stock market sentiment.

Shell, a unit of Anglo-Dutch giant Royal Dutch/Shell group, earlier said it would seriously consider undertaking an IPO of its shares if the equities market would show some improvements.

Under the oil deregulation act of 1998, refiners are required to list at least 10 percent of their shares on the PSE within three years of law’s passage. Mirant Phils., a subsidiary of Atlanta-based energy group Mirant Corp., earlier bared plans to list a percentage of its outstanding shares at the stockmarket but no timetable was given.

Mirant Global Corp., on the other hand, is a joint venture between Mirant Corp. and the Metrobank Group, formed to acquire the 72 megawatt Panay Power Corp. from First Philippine Holdings Corporation.

This is in pursuit of power projects in the Visayas region including the 40 MAW expansion of the Iligan power plant.

First Gen is the holding firm for all the power generation assets of the Lopes-controlled First Philippine Holdings Corp. Beyond Cable Holdings, the merged entity for the Lopes Group’s SKYCable and Philippine Long Distance Telephone Co.’s Philippine Home Cable Holdings Inc., is also expected to go public in the next two years.

Home Cable has a 33.5-percent stake in Beyond Cable. Another IPO long-awaited by the public is that of Smart Communications Inc., the profitable cellular subsidiary of PLDT which is required by its franchise to conduct an IPO by August this year. However, PLDT officials have said Smart’s listing would have to be deferred until 2006.

Only one company– PetroEnergy Corp. has so far listed at the PSE this year. Investors have opted to stay on the sidelines until after the national elections.

Last year, five companies were listed on the exchange–Transpacific Broadcast Group, Cashrounds Makati Finance Corp., Supercity Realty Development and PSE Inc.

Shares sold through IPOs are offered for the first time to the public by the company (primary market) whereby proceeds of the sale go directly to the company.