Asian Development Bank (ADB) [link] declined a chance to speak to MB about its pioneering “ETM” financial vehicle for the early retirement of coal-fueled power plants, citing heavy workload. I was hoping to do another “Inside the Boardroom” special edition with ADB on the special purpose vehicle that ADB helped create to alleviate ACEN of its coal power plant.
MB Quick Take: Oh ADB, we’re all busy. But I understand. Still, I hope that someone will be able to put aside some time to help us better understand the importance of this “mechanism” to the health and wellbeing of Filipinos. Coal power kills 25 people per terawatt-hour of electricity generated.
Converge [CNVRG 12.66 1.44%] [link] said that its fiber “footprint” to over 600,000 kilometers as of the start of October. CNVRG said that it is “on track” to achieve its 2022 targets through its “Go Deep” and “Go National” strategies. “Go Deep” pushes development of last-mile fiber connections to reach under-served near fiber trunk lines, and “Go National” pushes trunk lines into new regions and islands to open up new markets.
MB Quick Take: This is a nice bit of news to combat the negativity that we’ve seen against CNVRG, but really we’re all going to be looking at the Q3 and Q4 financials to see how sharp the decline is in new user sign-ups. The proof will be in the financial pudding.
PetroEnergy Resources [PERC 4.42 4.74%] [link] said that its Japanese strategic investor, Kyuden International Corporation (KIC), has completed the initial closing requirements on its investment in a 25% stake in PREC’s subsidiary, PetroGreen Energy Corporation (PGEC). The buy-in by KIC will reduce PERC’s ownership stake in PGEC to 67.5%, and will reduce the stake of EEI Power, a subsidiary of EEI [EEI 3.20 2.24%], to 7.5%.
MB Quick Take: The Yuchengco Family has come to life over the past couple of months. This investment by KIC brings a wealth of experience operating thermal, geothermal, hydro, and nuclear power facilities in Japan. Interesting set of skills to bring onboard.
FMETF [FMETF 93.60 0.32%] [link] was halted for over an hour because the iNav price tracker was not updating in real-time. FMETF was halted at 10:25am, and was re-activated by 11:25am once the issue was resolved.
MB Quick Take: I’m glad that these problems are resolved so quickly, but this is the second time in a little over a month that the PSE has had to halt trading in FMETF stocks to fix an iNAV tracker problem. The PSE’s only ETF was down 45 minutes the first time, and 60 minutes the second time. It’s not trending in the right direction.
Bank of Commerce [BNCOM 8.00 0.63%] [link] notified that it will divert P940 million of its IPO proceeds that were supposed to be spent on IT infrastructure upgrades into additional capital for its lending activities in Q4 of this year. BNCOM’s board decided to re-allocate the funds because it’s already exhausted the portion of the IPO proceeds that were supposed to go to lending and securities purchases, and it discovered, through negotiations with IT services vendors, that payments for IT upgrades can “stretch over multiple years”.
MB Quick Take: I find it a little rich that a company as sophisticated as BNCOM, with its pedigree as a member company of the San Miguel Group, would just find out all of a sudden that IT upgrades don’t just cost P1 billion in one downpayment. That said, I don’t think that BNCOM should necessarily be married to keeping that P940 million in a silo, waiting to be deployed on IT spending. If I were a shareholder, I’d want the company to deploy the capital in the most profitable way possible, without sacrificing any of the IT-related goals that it set when it took my money in the first place. It still feels... counter-intuitive that a board of directors should be able to unilaterally divert the funding as it sees fit, without input from the people it took money from.
Italpinas Development [IDC 0.80 9.59%] [link] board voted to authorize the issuance of 20% of the company’s unissued shares through private placements. IDC plans to put the proceeds toward the acquisition of properties.
MB Quick Take: IDC has around 629 million common shares issued and outstanding, but it recently (November 2021) raised its authorized capital stock to 1.3 billion common shares. That means that it has around 670 million authorized, but unissued, common shares just sitting on the sidelines waiting to be sold. The board has authorized the management team to sell up to 20% of this unissued batch, which would be around 134 million shares. At IDC’s current price of P0.75/share, a private placement sale of that entire amount could raise around P100 million. The proposal will need to get shareholder approval before it goes ahead.
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