First Holdings okays 2-year P6-billion share repurchase program

MANILA, Philippines - First Philippine Holdings Corp. (FPHC) has approved a two-year share buyback program of up to P6 billion worth of its shares.

In its disclosure to the Philippine Stock Exchange, FPHC said the amount is equivalent to around 19 percent of the company’s outstanding common shares at yesterday’s closing price of P52.50 each or 50 centavos higher than Wednesday’s close.

The program will be executed through the open market through the facilities of the exchange and will not involve active and widespread solicitation from stockholders.

Francis Giles B. Puno, FPHC senior vice-president, treasurer and chief finance officer, said the program is “intended to strike a balance between enhancing the company’s capital structure and maintaining the ability to fund future growth and investments.”

He said the buyback transactions are triggered if a company’s stock is substantially undervalued, when there is high volatility in share prices or in any instance where a buyback should serve to improve shareholder value.

Boosted by a one one-time gain from the sale of its stake in power utility giant Manila Electric Co. (Meralco), FPHC reported a net income of P24.6 billion in the first quarter.

The profit was driven by the P23.6-billion combined gain on the sale of FPHC’s 6.6 percent stake to Beacon Electric Asset Holdings Inc., the group led by telecommunications magnate Manuel V. Pangilinan.

Without the gain on sale, net income for the quarter would have been P1 billion which is significantly higher than last year’s net profit of P178 million due to the surge in earnings contribution of subsidiaries.

FPHC earlier approved the declaration of a P4.36155 cash dividend per share on the Series B preferred shares amounting to P187.55 million. Stockholders as of July 8, 2010 are entitled to the cash dividends payable on Aug. 2, 2010.