PAL Holdings, Philcomsat meet minimum public float rule

MANILA, Philippines - Three listed companies are now compliant with the public ownership rule, well within the one-month leeway given by corporate regulators.

Flagship carrier PAL Holdings Inc., dormant holding firm Nextstage Inc. and Philcomsat Corp. have breached the 10 percent minimum public float requirement.

On June 28, the Securities and Exchange Commission (SEC) en banc granted the request of Nextstage, PAL Holdings and Philcomsat “for additional time to comply with the minimum public ownership requirement of the Philippine Stock Exchange (PSE).”

The erring firms were given until July 31 to increase their public ownership.

On July 9, PSE lifted the  five-year trading suspension on Nextstage’s shares. Nextstage, which now has a public ownership level of 10.15 percent, also complied with the structured reportorial requirements.

For its part, shares of PAL Holdings resumed trading on July 12 following its compliance to the minimum public ownership rule.

PAL Holdings increased its public float to 10.22 percent after selling 2.41 billion new shares to private investors, which are unrelated to the company or any of its controlling stockholders, directors or officers. Prior to the transaction, PAL Holdings had a public float of just 0.55 percent.

Philcomsat, which derives its income from money market placements and bank deposits, was also able to comply with the requirement, with its public float level now at 10.01 percent. However, trading suspension on its shares has yet to be lifted.

“The data we have is [the three firms] already complied but we are awaiting the certificate from the Bureau of Internal Revenue (BIR),” PSE president and CEO Hans B. Sicat said earlier.

Documents from the BIR will certify that the shares were transferred to public investors.

In January, PSE suspended the trading of numerous firms because of failure to meet the required minimum public float.

This prompted several companies like Alphaland Corp. and Southeast Asia Cement Holdings Inc. to sell shares to the public while companies like Metro Pacific Tollways Corp. and San Miguel Brewery Inc. opted to exit the local bourse.

State-run Philippine National Oil Co.-Exploration Corp. became the first local company to be delisted for non-compliance with the public ownership rule after the June 30 deadline.

Involuntarily delisted companies are not allowed to go back to the local bourse for five years.

The minimum public float rule was intended to provide a fair and efficient facility for price discovery and ensure that sufficient liquidity exists.

In contrast, securities exchanges in Hong Kong, Singapore and Thailand already impose minimum float requirements of between 10 percent and 25 percent.