Why PLDT has more listed than issued shares

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The website of the Philippine Stock Exchange shows the following capital profile of Philippine Long Distance Telephone Co. (PLDT): 216.056 million outstanding common shares, 233.926 million listed common shares and 218.78 million issued shares.

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A listed company regularly reports its capital stock, which includes common shares and non-voting and voting preferred shares, if it has them. This is the rule that applies to all listed stocks.

Yet the Indonesian-owned PLDT discloses in its filings only common shares, depriving public stockholders the exact picture of its capital profile.

Despite the omission, the public is able to get the number of PLDT’s treasury shares by deducting the number of outstanding common shares from the number of issued common shares. Thus, 218.78 million minus 216.056 million equals 2.724 million. The difference more or less tallies with PLDT’s third quarter financial filing in which it reported its acquisition of 2.72 million shares under a buyback program “for total consideration of P6.505 billion.” According to PLDT, this translates to “a weighted price of P2,388 per share.”

Issued vs listed shares
Here is another computation: PLDT’s 233.926 million listed shares minus 218.78 million issued shares equals 15.146 million. This did not puzzle Claro Apolinar, a reader of The Manila Times who also reads “Due Diligencer”, but wanted to know who made the “Note to Emi: Please confirm the number of listed shares is higher that the number of issued common shares.”

This is my response to said “note”, which, hopefully, will explain the discrepancy in PLDT’s capital profile posted on the PSE website.

The difference of 15.146 million common shares between listed and issued shares is what appears to be a mysterious number. It is not because it resulted from the conversion into PLDT common shares of either convertible preferred shares or American Depositary Receipts, which are listed on the New York Stock Exchange.

Each ADR, which is issued separately, is convertible into one PLDT common share. When such conversion takes place, it should not cause the company’s foreign ownership to exceed the 40 percent limit.

Capital stock
A company may issue various classes of shares such as common shares and preferred shares, whether voting or non-voting. To raise more capital from foreign investors, like PLDT, it may also issue ADRs. All these classes of issuances make up the capital stock, which, in more cases, has only common shares.

Unfortunately, Due Diligencer could not find disclosures that would justify the PLDT’s additional 15.146 million listed common shares. Unlike JG Summit Holdings Inc., which is owned by businessman John Gokongwei Jr. and his family, the telecom giant either did not make a disclosure or failed to disclose the conversion into common shares of either convertible preferred shares or ADRs—unless Due Diligencer missed its filings.

According to the PSE website, JG Summit has 7.163 billion issued common shares and 7.32 billion listed common shares, or a difference of 157 million common shares.

JG Summit made public thru a PSE posting its offer of 428.175 million common shares to pay certain creditors. Computed in 1994 at a P13.75 offered price per share, the debt-to-equity swap would total P5.887 billion. That is, if the creditors took up JGS’s offer to pay fully them in stocks.

The share payments partly explain why JG Summit, like PLDT, has more listed shares than issued shares.

Incidentally, if JG Summit’s creditors had accepted all the 428.175 million shares, these would have today a paper market value of P31.257 billion at P73 per share, which is 5.31 times P5.887 billion at the agreed price per share of P13.75.

esdperez@gmail.com.

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