Acesite’s P400-M rights offer not achievable

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Emeterio Sd. Perez

Emeterio Sd. Perez

While Due Diligencer has focused much on publicly known conglomerates, this time, this piece is about the hotel chain owned by the Gatchalian family.

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A little bit of warning: The results of the computations may be confusing, but there is nothing that Due Diligencer could do about the confusion because the data culled from various postings contain a number of unknown factors that need some deciphering to show how Acesite (Phils.) Hotel Corp. is considered a listed holding company but may not necessarily qualify as publicly held.

As parent company, Acesite owns and operates the Manila Pavilion Hotel, previously a member of the Hilton group, an international hotel chain. As Manila Hilton, it used to belong to the Delgado group, or Delbros, which sold the hotel many years ago to its present owners.

Acesite has authorized capital stock consisting of 1.2 billion common shares and 20,000 preferred shares. Of the common shares, only 344.7 million are issued and 1.35 million shares are held in treasury, according to an ownership filing.

The website of the Philippine Stock Exchange has more details on Acesite’s capital stock. It listed 344.7 million as “outstanding shares, 346.1 million as “listed shares” and 346.1 million as “issued shares.”

The same website did not show the number of treasury shares, which should total 1.35 million by deducting the number of outstanding shares from the number of issued shares. But it did list a free-float level of 42.3 percent. But, 42.3 percent of what? Nobody knows if it should be 42.3 percent of outstanding shares or listed shares or issued shares.

Based on ownership disclosures as of July 31, 2015, Acesite should be more public than other listed companies. Waterfront Philippines Inc. (WPI), which is also listed, holds 192 million common shares, or 55.49 percent. Based on its own computations, Acesite arrived at public ownership of 130 million common shares, or 37.57 percent, held by PCD Nominee Corp. for “various owners.”

When computed to get the number of outstanding common shares, the results showed the following: Waterfront’s 55.49 percent was based on 346,089,488 outstanding common shares. PCD Nominee’s 37.57 percent was computed on 346,099,528 outstanding common shares. This meant a difference of 10,040 common shares.

(Here are Due Diligencer’s computations based on 344 million reported outstanding common shares: WPI’s 192 million common shares equals 55.7 percent while PCD Nominee’s 130 million equals 37.7 percent.)

Perhaps, the public ownership report (POR) could give outsiders, who are the public stockholders, the true ownership profile of Acesite. It may be more informative than any other ownership filings that the Gatchalian-controlled hotel has disclosed to the public.

Luckily, the number of outstanding common shares in the POR tallied with that shown on the PSE website. However, as of June 30, 2015, Acesite’s POR showed 346.1 million as “number of issued and outstanding common shares. Then deducting 1.35 million treasury shares from 346.1 million, Acesite’s POR came out with 344.7 million “number of outstanding common shares.”

(The number of issued shares increased by 58 shares on Acesite’s acquisition of total fractional shares resulting from the declaration of stock dividends.)

By the way, if outstanding shares refer to stocks actually held or owned by stockholders, not all of them are required to be listed on the exchange. Allied Banking Corp. listed only preferred shares for trading but these have rarely been traded until it merged with Philippine National Bank. Both banks belong to the group of companies of businessman Lucio Tan.

If the public is confused when going over Acesite’s PSE postings, they are not alone in this predicament. As a matter of fact, even the Gatchalians and their lawyers may themselves be confused by the content of their own filings.

Recall the days when, as majority stockholders, the Gatchalian-controlled board decided on a stock rights offering which would entitle a stockholder owning one Acesite share to buy 0.58 share, from which the company expected to raise P400 million.

Here are the computations to show Acesite’s stock rights offering. At 0.58 per one Acesite share, the company would issue 49.9 million shares. Then it changed the ratio to one is to one, which would double the number of outstanding shares to 689.5 million. From the offered shares, Acesite hoped to raise P400 million at a price of P1.16 per share or even higher.

Acesite could not possibly set the stock offering price at P1.16 when its share price had hit only P1.08 on Sept. 14. Way back on July 22, Acesite peaked and closed at P1.20. Since then, its share price has been dropping and on Aug. 24 and 25, it fell to a low of P1.04.

As a result of Acesite’s market performance, the company’s owners and their lawyers decided to call off the stock rights offer. On Aug. 26, its board “decided to defer the stock rights offering because of the unfavorable market conditions brought about by the China financial crisis and the Greek debt crisis.”

Were these the two factors that forced Acesite to postpone the stock rights offering that it has been trying to undertake since 2014? Due Diligencer will try to find the answer for its next piece.

esdperez@gmail.com.

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