SEC okays GMA7, Cebu Air request on FS submission

The Securities and Exchange Commission (SEC) has granted the request of GMA Network Inc. and Cebu Air Inc. for exemption from the rule requiring companies intending to go public to submit audited interim financial statements (FS).

In their request, GMA Network & Cebu Air asked that they be allowed to submit reviewed financial statements in lieu of audited financial statements for the first quarter of 2007.

Both companies, through Romulo, Mabanta, Buenaventura, Sayoc and Angeles law office, said the timetable contemplated for an initial public offering (IPO) does not give the company sufficient time to generate the first quarter of 2006 and 2007 audited financial statements.

Such requirement, according to the law office, restricts the flexibility of a company in scheduling an IPO since the time needed to prepare the audited financial statements would leave the issuer no choice except to schedule the offer and listing at the end of the 135-day retirement of foreign regulators.

The issuer also risks not being able to take advantage of favorable market conditions and access the market at a specific time because it must complete the audit of its quarterly financial statements.

The law office said external auditor Sycip, Gorres Velayo & Co. has confirmed that given the information that need to be prepared and procedures that need to be conducted for a full audit, it will take them approximately six weeks to issue audited financial statements but only three to four weeks to issue financial statements to the SEC.

The objective of an audit of financial statements is to enable the auditor to express an opinion whether the financial statements are prepared in all material respects, in accordance with an identified financial reporting network.

The SEC approved the request after noting the limited timeline for the preparation and submission of the financial statements and offering prospectus and the strict 135-day period.