• Sys’ P355.169-B paper wealth in BDO

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    Emeterio Sd. Perez

    AS of Sept. 30, 2016, SM Investments Corp. (SMIC) owned 1,463,657,368 common shares, or 35.15 percent, in BDO U lan” to its holdings, which reduced its ownership by 0.01 percent to 35.14 percent.

    In a filing, SMIC said its indirect holdings as of Dec. 31, 2016 in BDO totaled 259,015,798 common shares or 6.22 percent, the same number of shares it owned as of Sept. 30, 2016.

    On Dec. 31, 2016, SMIC increased its total direct and indirect holdings to 1,846,273,166 voting shares, including 123.6 million preferred shares, or 2.97 percent, as of Sept. 30, 2016.

    Jose Sio, BDO executive vice president and chief financial officer, signed the filing, which was posted on Jan. 20 on the website of the Philippine Stock Exchange.

    Outstanding capital

    Based on data posted on the PSE website, BDO has 4,366,475,594 outstanding shares, of which 3,650,072,708 shares were issued. That’s a huge difference of 716,402,886 shares. Of the bank’s issued shares, 3,649,452,038 shares are listed.

    To get a clearer picture of BDO’s ownership profile, public investors should read the bank’s general information sheet (GIS) filed with the Securities and Exchange Commission.

    As reported in the GIS as of Dec. 31, 2016, the bank’s 6.5 billion authorized capital stock consists of 4.5 billion common shares and 2 billion preferred shares. Both classes of shares carry a par value of P10 per share, or a total authorized capital of P65 billion.

    Of BDO’s authorized capital stock of 4,366,475,594 shares reported in the GIS, 4,165,072,708 shares were outstanding, equivalent to P41,650,727,080 at P10 par value.

    515M preferred shares

    The bank’s GIS listed 12,425 Filipinos as owners of 2,534,175,288 common shares, or 60.84 percent, and 339 foreigners as holders of 1,115,897,420 common shares, or 26.79 percent. These stockholders own a total of 3,650,072,708 common shares, or 87.63 percent of 4,165,072,708 outstanding common and preferred shares.
    The same GIS listed only two stockholders as owners of 515 million preferred shares, or 12.37 percent of 4,165,072,708 outstanding capital stock.

    The SM group of businessman Henry Sy Sr. and his family controls all 515 million preferred shares through Sybase Equity Investments Corp. and SMIC, which hold 391.4 million preferred shares, or 9.40 percent, and 123.6 million preferred shares, or 2.97 percent, respectively.

    The preferred shares alone, computed on 4,165,072,708 outstanding capital shares, give the Sys 12.37 percent voting power.

    Discrepancy?

    Why did the number of BDO’s outstanding shares reported on the PSE website top the number of issued shares by 716,402,886 shares?

    Public investors may be puzzled by what appears to be a discrepancy between the number of outstanding shares and issued shares reflected on the PSE website.

    The curiosity of the public investors should have led them to a posting regarding BDO’s rights offer of 716,402,886 shares common shares at P83.75 each to stockholders as of January 10. Under the offering, a stockholder was entitled to buy one share for every 5.095 shares he or she owned.

    The offer period started on January 10 and will end tomorrow, January 24.

    Like other listed companies, BDO adopts the motherhood statement. It said the proceeds were intended to “support BDO’s medium-term growth objectives amid the country’s favorable macroeconomic prospects…and to sustain its momentum and take advantage of the country’s growth opportunities.”

    Market performance

    On January 10 when BDO’s rights offer began, the price of the bank’s common shares opened at P114.50, hit a high of P115.50, dropped to a low of P113.50 and closed at P113.80, down from the previous day’s P114.80.
    Its stock price kept falling, closing the session at P110 on Friday when it opened at P110.80, peaked at P111.50, and dropped to a low of P110.40.

    At BDO’s 30-day high of P116.20, the Sys’s paper wealth in the bank topped P355.169 billion. The family “lost” P39.123 billion when the stock fell to P103.40, decreasing the value of their holdings to P316.046 billion.

    The computations were based on the family’s control of approximately 70 percent of BDO’s 4.366 billion outstanding common shares. The estimate of the Sys’ ownership in BDO is based on their individual holdings and the common shares held by the corporate stockholders that they also own and control.

    Yes. With their holdings in BDO alone, the Sys are already very rich. How much more would they be worth if everything else in the conglomerate that they own is computed to the last centavo? Just asking.

    esdperez@gmail.com

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