Co family’s P2-B paper loss in Da Vinci

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If you happen to be a neophyte investor in stocks listed on the Philippine Stock Exchange (PSE), you may find it difficult to decipher the ownership of the companies in which you place your money. The difficulty lies in perusing the layers and layers of ownerships when the beneficial owner or owners should have been identified at the earliest

For instance, a public ownership report (POR) as of June 30, 2015 listed Invescap Inc. as an indirect holder of 956.2 million shares, or 85 percent, in Da Vinci Capital Holdings Inc. Said controlling ownership leaves the public with 168.8 million shares, or 15 percent.

Of course, the POR already identified businessman Lucio L. Co as a member of the board and president of Da Vinci. Why should the public be given more than a simple hint of the company’s ownership profile?

Yes, it is true that the man behind the S&R chain of membership stores is already identified in said POR. But why was he not named, along with his family, as also the owners of Invescap?

Ownership filings
Then you go over the list of the Top 100 PDCT participants also as of June 30, 2015. The acronym stands for Philippine Depository and Trust Corp.

Incidentally, your discovery of PDCT should lead you to the list of top 100 stockholders of Da Vinci, which shows PCD Nominee Corp. as the stockholder on record of 1.09 billion shares, or 96.75 percent.

Then you ask yourself: Why 96.75 percent? What about the public who, as a rule, must own at least 10 percent of the outstanding common shares in listed companies?

Contrary to your suspicions that Da Vinci Capital Holdings may have violated the ownership rule, the public still owns 15 percent of the company, which is way above the minimum public ownership requirement of 10 percent.

Trading participants
Here are the numbers as they appear in PSE postings. The PCD Nominee-held 1.09 billion shares, equivalent to 96.75 percent, includes Invescap’s 85 percent.

By the way, while Invescap owns 85 percent of Da Vinci, of the remaining 168.8 million share, or 15 percent, 132.23 million shares, or 11.75 percent, are held by various trading participants. Individual stockholders own 36.6 million shares, or 3.2 percent.

Your search for a complete ownership profile of Da Vinci Capital does not end with Invescap. As a public investor, you would certainly be curious to know who owns Invescap.

Formerly Mariwasa Manufacturing Inc. formed in 1953, the company changed its name to Mariwasa Siam Holdings Inc. in 2008 and to Da Vinci Capital Holdings in 2013. These changes are reflected under the “company description” page on the PSE website and in the footnotes to the company’s audited financial statements.

Cos behind Invescap
Finally, who owns Invescap? Well, you only have to turn to the PSE website to know the answer. By going over various filings, you would conclude that Co and his family control Da Vinci Capital thru Invescap.

Haven’t you noticed? Since its takeover of Da Vinci, Invescap has maintained its 85-percent ownership in the company. This suggests that the Cos remain with the company because it provides them with more than a billion-peso fortune.

At P1.40 per share, Invescap’s 956.2 million shares gives the Cos a paper wealth of P1.34 billion against an acquisition cost of less than P300 million. That’s a little over P1 billion in paper gross profit for the family.

Here is the big but: The Cos were even much richer on paper many months ago, when Da Vinci’s share price hit a high of P3.59. At this price, they were multi-billionaires with a paper worth of P3.43 billion.

How does it feel to lose P2 billion in less than a year even in imaginary trading only? Ask the Cos, who are not selling anyway.

esdperez@gmail.com

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2 Comments

  1. Hi sir, I’ve been reading your articles and found it insightful. Can you write about foreign exchange gains/loss. We are expecting the Euro to plunge because of the Greece exit. There was a selloff of SSI as their inventory came mainly from europe and was bought in Euros therefore a foreign exchange loss with the value of their inventory… As a shareholder in ISM, I also notice a 17 Million foreign exchange gain for the current first quarter income because their debt is in Euros. Do you think they can benefit more and getting more foreign exchange gain as the Euro is expected to plunge? Are there any other stock that is affected with the plunge that you know off? Thanks in advance..