WITH CAT Resources and Asset Holdings Inc. (Crahi) entrusting its holdings in Central Azucarera de Tarlac Inc. (CAT) to PCD Nominee Corp., it would be easier for it to sell some, if not all, the CAT shares that it owns. As of the latest filing dated Aug. 11, 2015, CAT reported Crahi as owner of 20.17 million CAT shares, or 71.4 percent.
Crahi ended up holding 21.1 million CAT shares, or 74.69 percent after buying out the majority and individual or minority stockholders of the Cojuangco-owned sugar central.
Computed, Crahi’s CAT holdings had drastically dropped by 3.3 percent, which is the percentage equivalent of 932,640 CAT shares that were “missing” after Crahi reported its ownership of 21.1 million CAT shares on Oct. 15, 2014. At P91 per share, the “missing” CAT shares had a market value of P84.87 million.
Does the reduction in Crahi’s ownership in CAT suggest that it did not intend to hold on to its majority and controlling ownership? If the filings were used as basis, then Crahi would soon give up on the sugar central.
A filing, as a matter of fact, showed the latest sale of 482,680 shares at P91 per share by Crahi. At this price, the buyer or buyers, who were not identified, paid P43.92 million for the acquisition.
(There should be a rule on the full disclosure of facts surrounding the sale of a big block of shares. The disclosure should not be limited to the identity of the seller but should also include the names of the buyers.)
Crahi, which is co-owned by businessmen Martin Lorenzo and Fernando C. Cojuangco, originally targeted to buy the remaining 8.48 million CAT shares, or 30 percent, held by the public but its offer attracted only 1.33 million shares, or 4.7 percent.
The latest ownership filing dated July 31, 2015 and posted by CAT on the website of the Philippine Stock Exchange on Aug. 11, 2015 listed the public as owners of 3.34 million CAT shares, or 11.84 percent, which is way above the minimum public ownership requirement of 10 percent.
CAT classified Luisita Trust Fund (LTF) as a significant stockholder. The fund still owns 4.7 million shares, or 16.76 percent. Together, Crahi and LTF had total holdings of 24.9 million CAT shares, or 88.16 percent, with a market value of P2.27 billion.
I decided to revisit the ownership profile of the sugar central formerly owned by the Cojuangco family, that is, on the side of the present Malacanang chief occupant, for the information of the public who may be speculating that something positive is going to happen with the takeover of a new group. This new group consists of an existing stockholder and a newcomer.
Perhaps something good may be in the offing, which could be an optimistic assumption given the price per share of P91 offered by Crahi. It pays for the public to wait for a better market as CAT hit a 52-week high of P109.90 from a year-low of P71.55.
While this piece is an update on CAT’s ownership, it is also an invitation for the regulators to take a closer look at how the company may have failed to make a full disclosure on the whereabouts of the holdings of a certain Manuel Dimaculangan who, a few years ago, was identified as the buyer of 301,792 CAT shares, or 1.07 percent. At P91 per share, Dimaculangan had a paper wealth of P27.5 million.
If Dimaculangan had bought out the 301,792 CAT shares held by President Benigno Simeon Cojuangco Aquino 3rd at P20.36 each in 2011, his acquisition must have cost him P6.14 million. The transaction should have grossed him a paper profit of P21.3 million, which is not bad for a three-year hold on his CAT shares.
Back in February 2014, I wrote that “it was enough that CAT reported the divestment by President Aquino of his CAT shares.” By also writing “No more questions please,” SEC Chairperson Teresita Herbosa must have found some justification in not initiating an investigation into the Aquino-Dimaculangan deal. She could not and should not be faulted for failing to review the transaction because, as an Aquino appointee, she would not antagonize her godfather.
Apparently, Herbosa had to choose between her loyalty to Malacanang and her duty to the public as the chief securities regulator. By choosing the former, she was only being practical in not displeasing the appointing power that gave her a seven-year term that started in 2011.
Because Herbosa and her fellow SEC commissioners could not and would not want to displease their chief, the public would have to wait for their respective terms to end. Hopefully, the next five-person commission would balance the interest of both the public and the majority and controlling stockholders and not favor one side and sacrifice the other.