Sorianos’ P6-B paper profit in Anscor

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Emeterio Sd. Perez

Emeterio Sd. Perez

Comments on Due Diligencer’s “Buying SMCDC condo unit is not always fun” show that the non-issuance or delayed issuance of titles for fully paid condominium units is not a monopoly of SM Development Corp. A few wrote to say they have had similar experience with other developers.

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But to be fair to these condo builders and sellers, the government regulators, such as the Bureau of Internal Revenue, the Land Registration Authority and the Housing and Land Use Regulatory Board could also have contributed to the delay in the issuance of titles. Whatever the problems are, condo unit buyers should be properly told.

Of course, SMDC and other property developers would never squeal on the inefficiency of government agencies for fear of antagonizing them. Imagine what could happen to their other projects if they persisted on proving themselves right about the inefficiency of government agencies.

SMC’s financials
San Miguel Corp. remains profitable despite its liabilities, which, as of June 30, 2015, stood at P845.992 billion – divided into non-current liabilities of P497.914 billion and current liabilities of P348.078 billion.

Despite these debts, SMC is able to pay interests on them. It said in a financial filing that its “interest expense and other financing charges” totaled P15.779 billion in the first six months of 2015, up 6.824 percent from P14.771 billion in the same period last year.

That’s one piece of good news as far as SMC is concerned. As far as accounting entries are concerned, the company remains in good financial health because the dividends due its preferred shares, of which it has many, come from retained earnings.

As of June 30, 2015, SMC had 1,346,406,667 preferred shares of various series and subseries. As part of the equity, preferred shares earn dividends that are taken from unappropriated retained earnings of P121.498 billion. At P1.50 per quarter, the company paid an estimate P2.02 billion, the holders of more than 1.346 billion preferred shares.

Sorianos’ buyback
Anscor Consolidated Corp. (ASC) is a wholly owned subsidiary of A. Soriano Corp., the listed holding company of the Soriano family. But as a unit, it is also Anscor’s majority stockholder, owning 1.259 billion Anscor shares, or 50.36 percent of 2.5 billion outstanding shares.

The Soriano-owned ASC has accumulated shares in its parent company by buying them in the open market. The question is how then does the public qualify the relationship between the parent and the subsidiary?

Well, as far as Due Diligencer is concerned, ASC-held Anscor shares should be treated as treasury shares. That is the only way to classify them so that the public would not be misled in their analysis of the listed company’s ownership filings.

What Anscor has not publicly disclosed is the use of corporate funds by its unit. Did ASC buy all those Anscor shares using its mother company’s funds? It seems so because an entry under the stockholders’ equity shows P2.171 billion as the “cost of shares held by a subsidiary.” This acquisition cost translates to P1.724 per share.

The Sorianos are lucky because their acquisition of Anscor shares through ASC has paid off. On Friday, Anscor finished trading at P6.70, putting them ahead by P4.977 for gross profit of P6.266 billion, on paper, because they didn’t sell.

Insiders’ trades
On Aug. 25, 2015, Manuel L. Lopez Jr., a member of the board of Rockwell Land Corp., bought 75,000 Rock shares at P1.50 apiece. The acquisition, which he made in three trades of 25,000 shares each, increased the number of Rock shares he owns to 75,001 shares, including one share he holds to qualify for election to the 11-man board. At Firday’s closing level of P1.60, he was ahead by 10 centavos.

Rodel A. Garcia, chief technology officer of Manila Water Co. raised his MWC holding to 503,600 shares after buying 1,000 WMC shares at P21.50 each on Aug. 25. At Friday’s close of P22.66, he gained P1.16 apiece, or 5.395 percent.

Manila Water recently declared P0.4075 per share dividend, with a record date of Aug. 26, payable on Sept. 9.

esdperez@gmail.com.

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1 Comment

  1. “…non-issuance or delayed issuance of titles for fully paid condo units” in my opinion is fraud to the nth degree. For you to pass part of the blame on government agencies for the delay and noting that “a few had similar experiences” indicates to me that you are trying to mitigate the builders/sellers’ delaying tactics without further investigation. You may find that the builder’s financial statement will still show this an asset in their books. You also did not cover stories of failed condo building projects and buyers having lost their hard earned money because builders have used the deposits/down or installment payments instead of putting it in escrow. You also did not cover the ownership between the banks and the builders/sellers which may show the bank as different corporations from the builder/sellers but owned by the same people or their proxies. This could be described as a collapsible transaction and should be reviewed by the SEC. When a bank goes bankrupt that funded the builder a chain breaks and it is not only the creditors or investors who will lose money but the buyers who has fully paid their units as well. Additionally, you did not cover in your reporting disclosure statements, time of the essence of closing and issuance of title, and escrow of monies. But am glad that it is about time that this pandora’s box be opened as there are many OFWs that are working so hard and to be defrauded by unscrupulous builders.