400% stock dividend!

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BERJAYA Philippines Inc. is increasing its authorized capital stock (ACS) to 6 billion shares from 2 billion to accommodate the declaration of a 400 percent stock dividend, equivalent to 3.473 billion. Its capital stock has a par value of P1 per share.

As reported in a filing posted on the website of the Philippine Stock Exchange (PSE), the company’s board approved—one after the other – the capital increase and the declaration of dividend in the same board meeting held on Oct. 6.

As of July 15, 2015, Berjaya reported retained earnings of P7.061 billion, of which P5.953 billion was classified as “appropriated” and P1.108 billion as “unappropriated.”

Berjaya needed to raise its authorized capital because of its ACS of 2 billion shares; it has issued 953.984 million, leaving 1.046 billion shares unissued. The dividend required 4 billion capital stock.


Of the company’s issued shares, 868.256 million remain outstanding, while 85.728 million are treasury shares.

Failed tender again

Federal Resources Investment Group Inc. recorded a 30-day high of P14.90 and a 30-day low of P11.70. On Oct. 7, it hit the day’s high of P12.80, which was its opening price, fell to a low of P12.30 and closed at P12.60.

On Oct. 5, Federal Resources disclosed in a regulatory filing that its board approved on Oct. 2 the ratification of the acquisition of 1.041 billion issued and outstanding shares in LBC Express Inc. for P1.384 billion. This translates to P1.33 per share.

Incidentally, PSE’s trading reports on Oct. 2 showed Federal Resources opened at P11.92, peaked at P12 and closed the session at P12.50.

Due Diligencer is reporting “the change in control” of Federal Resources as a result of the acquisition of 59.101 million FED shares, or 59.1 percent, at P1 par value, by LBC Development Corp.

Subsequently, LBC offered to buy the holders of the 40.899 million FED shares. There were no takers.

Who would possibly bite into an offer of P1 per FED share when the stock even traded at a high of P27.55 in the first quarter of 2015? At P1 per share, the offer was easily ignored by the stockholders of Federal Resources, who would rather wait.

Yet unpriced

In the face of the FED stock’s price surge, how much would Federal Resources price its issuance of 10 million additional shares? How about its secondary offering of 59.101 million FED shares? The number of shares tallies with the number of FED shares acquired by LBC on July 22, 2015. If LBC sold the 59.10 million FED shares under a secondary offering, would it sell them at the acquisition price of P1 per share?

The previous Due Diligencer piece carried the title “Failed Tender” in connection with the tender made by Tosoh Corp. of Japan to own the remaining 162.73 million shares in Mabuhay Vinyl Corp held by the public.

Now, here comes another case of a failed tender, which at the same time, had filings that would puzzle the imagination of regulators such as the SEC examiners. The SEC people would need to go over the corporate files of Federal Resources to fully understand the ownership changes.

Layers of ownerships

JG Summit Holdings Inc. is the listed holding company of businessman John Gokongwei Jr. and his family. This means the Gokongweis own everything that JGS owns.

For the information of the public who may be invested in listed JGS shares, here are some layers of ownerships that may be informative but may not necessarily cover everything they may want to know.

As the holding company of the Gokongwei family, JG Summit owns 1.215 billion shares, or 55.706 percent, in Universal Robina Corp (URC). Thus, URC is JGS’s food unit.

In Cebu Pacific Air Inc., which owns and operates the airline that bears the name, JGS is only an indirect stockholder. Instead of it directly owning 400.817 million CP shares, or 66.146 percent, the PSE posting listed CP Air Holdings Inc. at the top of the list of 100 stockholders.

CP Air is a wholly owned JGS unit.

As in URC, JGS is a direct stockholder of Robinsons Land Corp. in which it owns 2.496 billion shares, or 60.972 percent.

esdperez@gmail.com.

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