ICTSI issues 700-million preferred shares to Razon firm

MANILA, Philippines - Port operator International Container Terminal Services Inc. (ICTSI) has approved the issuance of 700 million Preferred B shares to Achillion Holdings Inc., owned and controlled by company chairman and controlling shareholder Enrique Razon Jr.

ICTSI said the creation and issuance of this class of voting and low par value preferred shares is intended to address the problem of the ceiling on foreign shareholdings which restricts the active trading by foreign investors of ICTSI’s listed shares in the Philippine Stock Exchange (PSE), without adversely affecting the beneficial ownership and economic interest of ICTSI’s existing shareholders.

The Securities and Exchange Commission (SEC) earlier approved the amendment of ICTSI’s articles of incorporation to reclassify its authorized one billion preferred shares with a par value of P1 per share into 993 million preferred shares to be renamed Preferred A shares with a P1 par value, inclusive of the outstanding preferred shares, and seven million preferred shares reclassified into 700 million Preferred B shares with a par value of one centavo.

In accordance with the board resolution and the terms of the amended articles of incorporation, ICTSI said the Preferred B shares issued to Achillion shall have the following features: first, it shall be issued only to Philippine nationals; second, it is not convertible into common shares; third, its dividend shall not exceed 10 percent of its one centavo per share par value; fourth, it shall be redeemable at the option of the board; and fifth, it shall be redeemed if the nationality restrictions applicable to ICTSI is lifted by law or constitutional amendment.

In addition, ICTSI shall have the right to designate a qualified Filipino national to acquire the Preferred B shares if Achillion wants to transfer the shares, the company said.

It said that its contract with the Philippine Ports Authority (PPA) for the operation, management, and development of the Manila International Container Terminal (MICT) requires the Razon Group to retain control of ICTSI.

ICTSI posted an 83 percent increase in its consolidated net income to $42.4 million during the first half of 2010 from $23.2 million in the same period last year.