Razon’s ICTSI holdings breach P100B

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Emeterio Sd. Perez

Emeterio Sd. Perez

Unusual generosity. On March 6, the board of Semi–rara Mining Corp. approved the distribution of P712.50 million in stock dividends, which gives a stockholder two common shares for every common share held.

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The stock dividends will be taken from the company’s unrestricted retained earnings as of December 31, 2013.

Semirara has not yet filed its audited financial report for 2013 but reported net profit of P7.54 billion for the said fiscal year. Its third quarter financial filing shows it has more than enough retained earnings of P10.952 billion as of September 30, 2013.

Of Semirara’s authorized capital stock of one billion shares, 356.25 million shares are fully issued and remain outstanding that implementing the declared stock dividend will require the increase to 3 billion shares.

Ictsi’s P16.52-B Capex. Being a global port terminal service operator, Filipino-owned International Container Terminal Services Inc. (ICTSI) uses the US dollar as the functional currency, the regulatory term, in its financial filings.

In its filings posted on the website of the Philippine Stock Exchange (PSE), ICTSI describes itself as “an international operator of common user container terminals serving the global container shipping industry.” The description apparently fits the company, for it operates in a number of countries in Asia, the United States and Europe.

Even with its worldwide operations, ICTSI is not about to stop expanding. From the company’s filings, the public investors, who trade ICTSI’s listed shares, would easily conclude that businessman Enrique K. Razon Jr., ICTSI chairman and president, sees more opportunities for growth.

“The group’s capital expenditures for 2014 are expected to be approximately $310 million,” ICTSI said in a report to stockholders. Including the 50-percent share in a $120-million foreign takeover, ICTSI is expected to spend a total of $360 million, or P16.52 billion at the exchange rate of P44.66 per US dollar.

Offering at P6.70. Razon is not only the single biggest stockholder of ICTSI but the majority stockholder too. He owns 1.678 billion shares, or 61.38 percent, consisting of 700 million voting preferred shares and 987.085 million common shares.

Razon’s common shares represent 48.53 percent of 2.034 billion outstanding common shares. The less than 50-percent ownership did not make the Razon group ICTSI’s controlling stockholder, but the only significant and biggest single stockholder of the company that was incorporated on December 24, 1987. The acquisition of voting preferred shares made Razon’s group ICTSI’s majority owner.

ICTSI was not to remain the small company that it was 26 years ago after it was awarded by the Philippine Ports Authority the “concession to be the exclusive operator of Manila International Container Terminal.”

The company’s first 25-year government contract ended in 2013 but was “extended for another 25 years up to May 18, 2038.” The extension meant happy days for the public investors, who availed themselves of ICTSI’s initial public offering at P6.70 per share in March 1992.

Razon’s P101-b holdings. As of March 3, 2014, ICTSI had 1,502 stockholders owning 2.03 billion shares, including 3.80 million preferred A shares and 700 million preferred B shares.

Of ICTSI’s 2,034 stockholders as of March 3, Razon is the only multi-billionaire. It is easy to compute his paper wealth. By multiplying 987.085 million common shares that he owns at P103 per share on February 26, up 8.42 percent from P95 on February 6, you will arrive at P101.67 billion.

ICTSI has two other members in the ICTSI board, namely Stephen A. Paradies and Jose C. Ibazeta, who may not even approximate Razon’s wealth.

A PSE posting shows Paradies holds 4.088 million shares, or P421.064 million, and Ibazeta 3.059 million shares, or P315.077 million. With their holdings, they would never go poor.

esdperez@gmail.com

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1 Comment

  1. Dennis Baguyo on

    Dear Mr. Perez,

    I never miss your columns. These have not only been informative but very interesting as well.

    If it’s not too much to ask, can you proffer a reason why the Yuchengco companies are not as fungible and popular as the other holdings of other taipans? It’s very curious for example to find the market capitalization (Php 4B) of House of Investments (HI) incongruent with its holdings in EEI. As you know, HI holds over 50% of EEI’s capital stock and EEI’s current market cap is at Php 12.2B). In short, HI’s market cap is only a third of EEI’s market cap.

    Your insights are eagerly awaited and appreciated.

    Sincerely yours,

    Dennis Baguyo