PSE to change rules on delisting

MANILA, Philippines — The Philippine Stock Exchange (PSE) is changing its delisting rules to strengthen the capital markets and make the process clearer for investors.

Under the draft amendments, currently out for public comment, the PSE is proposing to change the basis for the 2/3 stockholders’ vote requirement under the Amended Voluntary Delisting Rules from “total outstanding and listed shares” to “total issued and outstanding shares.”

It also proposed to amend the required ownership threshold after a tender offer.

Under the current rules, the delisting proponent is required to obtain at least 95 percent of the issued and outstanding shares of the listed company after the conduct of the tender offer in order for the listed company to qualify for voluntary delisting.

The PSE proposes to revise this requirement to align with the minimum public ownership or MPO rule and avoid a situation where the PSE cannot approve a petition for voluntary delisting because of the failure to obtain the 95 percent threshold, but the company will eventually be involuntarily delisted for non-compliance with the MPO requirement.

The PSE said proponents of the delisting must show that as a result of the acquisition of the tendered shares, the number of shares held by the public has fallen below the applicable MPO requirement.

“However, if at the time the petition for delisting is filed, the public ownership level of the listed company is already below the applicable MPO requirement, the person(s) proposing the delisting shall still be required to make a tender offer to all other stockholders of record and accept all tendered shares,” the PSE said.

On the conduct of the mandatory tender offer (MTO) requirement, the PSE said it may consider a mandatory tender offer undertaken pursuant to the Securities Regulation Code as compliance with the tender offer requirement in the Amended Voluntary Delisting Rule.

This is under the condition that the MTO complies with all the requirements in the Amended Voluntary Delisting Rules and that it would not result in the circumvention of investor protection provisions.

The PSE continues to see voluntary delisting applications from companies including Pangilinan-led Metro Pacific Investments Corp.

However, PSE president and CEO Ramon Monzon said the delistings aren’t a cause for concern as other exchanges in the region are seeing higher numbers of delistings.