SMC is more public than others


Emeterio Sd. Perez

TOP Frontier Investment Holdings Inc. has authorized capital stock of 740.26 million shares, divided into 740 million common shares and 2.6 million preferred shares.

Based on par value of P1 for common shares and P100 for preferred shares, it has total authorized capital of P1 billion, according to the company’s general information sheet (GIS) posted on the website of the Philippine Stock Exchange.

The same GIS as of July 26, 2016 showed that 12,684 Filipino stockholders had subscribed to 492.794 million Top Frontier shares, of which 437.786 million were common shares.

Only San Miguel Corp. (SMC) held 2.598 million outstanding preferred shares, of which it paid for only 1.905 million preferred shares. Top Frontier listed 278 foreign stockholders, who had fully paid for their 52.408 million common shares.

Top Frontier has two principal stockholders: businessman Inigo U. Zobel, who directly owned 199.601 million common shares or 59.62 percent, and Ramon S. Ang, who indirectly owned 86.614 million common shares or 25.87 percent.

Ang’s common shares in Top Frontier were held by his two companies, Master Yield Limited, 49.80 million common shares; and Privado Holdings Corp., 36.814 million common shares. Ang is also the president and chief operating officer of San Miguel Corp.

Top Frontier’s issued common shares totaled 490.196 million, of which 157.31 million were treasury shares, leaving the company with 332.886 million outstanding shares.

At the stock’s market price of P303 per share, Top Frontier has market capitalization of P100.865 billion. At the same market price, Zobel and Ang had paper wealth of P60.479 billion and P26.244 billion, respectively.

SMC’s P30-B capital

The authorized capital stock of San Miguel Corp. (SMC) consisted of 3.79 billion common shares, 300 million preferred S1 shares, and 1.91 billion preferred S2 shares. The company’s three classes of capital stock carried a par value of P5 per share, or total authorized capital of P30 billion, according to SMC’s GIS as of June 13.

Of SMC’s authorized capital stock, 2.318 billion (2,380,683,224) common shares and 1.751 billion (1,751,467,934) preferred shares were outstanding.

While SMC had only two classes of preferred shares in its authorized capital stock, it had more in its outstanding shares by reclassifying them. In its GIS, it listed only three Filipinos as holders of 279.407 million (279,406,667) S1 preferred shares, or 100 percent, while 1,316 combined for ownership of 1.085 billion (1,085,291,760) of other classes of preferred shares.

In the same GIS, SMC listed 34,609 Filipino stockholders who owned 2.326 billion common shares, or 97.70 percent. Of 1,312 foreigners who held 54.81 million common shares, or 2.30 percent, only 20 of them owned 7.063 million (7,062,840) preferred shares.

Ownership profile

In a public ownership report (POR) as of July 7, SMC reported two principal stockholders with combined holdings of 1.947 billion common shares.

Top Frontier and Privado Holdings held 1.573 billion common shares, or 66.03 percent, and 373.624 million common shares, respectively. It credited the public with 364.037 million common shares, or 15.28 percent. Thus, the ownership of the top two stockholders and of the public equalled 96.99 percent, leaving other stockholders, including company insiders, with the remaining 3.01 percent.

The computations were based only on SMC’s 2.382 billion outstanding common shares.

Incidentally, listed companies, such as SMC, are required to file PORs based only on common shares. If such rule changed to include preferred shares, PORs would have shown the true stock ownership of the public.

If these PORs included preferred shares in the computations of public ownership, the result perhaps would make some listed companies violators of the 10-percent minimum public ownership rule, with the exception of SMC.

As a listed stock, SMC may even rightfully claim to be more public than others. How did this happen? Your guess may be as good as Due Diligencer’s.

In the next column, Due Diligencer will report the implications of the issuance of preferred shares not only by Top Frontier and SMC but also by other listed companies.


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