BERJAYA Philippines Inc. is a foreign-controlled listed company. Its capital profile posted on the website of the Philippine Stock Exchange shows it has 4.341 billion outstanding shares with P1 par value. Its main business falls under the “services” sector. Under “sub-sector,” the company is engaged in “casinos and gaming.”
On Aug. 30, Berjaya Philippines shares closed trading at P5.70.
Of Berjaya Philippines’ 4.427 billion issued and outstanding common shares reported in a preliminary information statement, it identified six nationalities and “other alien” as holders of 3.837 billion common shares, or 88.37 percent. The list showed 97 Filipino stockholders subscribed to 590.257 million shares, or 11.62 percent, of which 504.529 million shares were paid-up.
Among Berjaya’s foreign shareholders, three Chinese control 3.221 billion Berjaya common shares, or 74.2 percent, followed by five Malaysians with 610.205 million shares, or 14.06 percent. The others are 18 Spaniards, 1.835 million shares; five Americans, 276,000 shares; two British, 229,920 shares; and one Swiss, 2,400 shares. “Other aliens” of unidentified citizenship hold 2.834 million shares, or 0.07 percent.
As of April 30, the list of top stockholders showed Berjaya companies with controlling ownership over 852.017 million common shares, or 89.3 percent. These are Berjaya Lottery Management (HK), 644.248 million common shares, or 67.53 percent; Berjaya Sports Toto (Cayman), 122.041 million common shares, or 12.79 percent. Eleven individual stockholders own the rest.
Berjaya group increased its holdings in Berjaya Philippines by Aug. 26 with Berjaya Lottery owning 3.221 million Berjaya Philippines shares, or 74.2 percent; and Berjaya Sports Toto, with 610.205 million shares, or 14.06 percent. Berjaya Philippines owns 85.728 million of its own shares, or 1.97 percent. PCD Nominee Corp. holds 399.859 million shares, or 9.21 percent, for Filipinos and 2.645 million shares, or 0.06 percent, for foreigners.
Whether a company directly engages in gaming or simply supplies the software and paraphernalia to government, it still is part of the legalized gambling. Never mind if the business activity is called gaming, the name most gaming companies prefer over gambling. What matters most is profit.
Berjaya shows the profitability of gaming. As of April 30, it reported retained earnings of P6.922 billion in a financial filing audited by Punongbayan & Araullo.
These earnings resulted from the operations of Philippine Gaming and Management Corp. (PGMC), a subsidiary, which leases online lottery equipment and provides software support to the government-owned Philippine Charity Sweepstakes Office (PCSO). In the last three years ending April 30, Berjaya Philippines reported dividend income, which was its only revenue, of P3.457 billion.
Minus operating expenses and taxes, Berjaya Philippines had net profit of P3.441 billion from April 30, 2014 to April 30, 2016.
With its earnings as PCSO supplier, Berjaya group expanded into other lines of business. It went into food and beverages. “As of April 30, 2014, the company (Berjaya Philippines) owns 30 percent of BPPI.” The acronym stands for Berjaya Pizza Philippines Inc.
Berjaya group also bought into the hotel industry by acquiring Best Western Astor Hotel through Perdana Hotel Philippines Inc. (PHPI), a subsidiary of Berjaya Philippines, which also owns 40 percent of Perdana Land Philippines Inc., the owner of the land leased to PHPI.
The group’s diversification in the Philippines did not stop with its indirect investment in real estate property. On the PSE website, Berjaya Philippines said it has also invested in Berjaya Auto Philippines Inc., which is “engaged in the sale and distribution of all types of motor vehicles” and in Cosway Philippines Inc., which is into the “wholesale of various products.”
As of April 30, 2015, Berjaya Philippines owned 30 percent equity in Berjaya Auto and 40 percent in Cosway.
3.473-B stock dividend
Sometime last year, I wrote in Duediligencer about the increase in the authorized capital of Berjaya Philippines to 6 billion shares from 2 billion shares. The increase was intended 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.
The capital expansion shows how the game of chance has made Berjaya Philippines very profitable. Instead of distributing its retained earnings as cash dividend, it decided to plow its earnings back to operation.
In a recent posting, Berjaya Philippines said, the Securities and Exchange Commission has approved June 24 as the record date of the company’s 3.473-billion stock dividend, which was to be accommodated in its new authorized capital of 6 billion shares.
The dividend payment was the reason for the adjustment of the stock’s market price from over P28 to P5.70.