• Will Stanley Ho remain Suntrust’s minority stockholder?

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    Emeterio Sd. Perez

    Emeterio Sd. Perez

    INSIDERS’ trades. Jose Cloribel Rodriguez 4th, treasurer of Concrete Aggregates Inc., sold 1.2 million shares at P40.20 each on July 17. He missed the stock’s session’s high of P46.20, then “lost” more the following day when Concrete Aggregates climbed 14.6 percent to close at high of P52.95. The sale reduced his holdings to 600,319 shares, or 2.2 percent, from 6.5 percent . . .

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    On August 6 when Lopez Holdings Corp. hit a high of P5.15 and dropped to a low of P5, Miguel Ernesto Lopez, a vice president, increased the number of shares he owns to 863,517 after buying 110,000 shares at P4.57 each by availing himself of the company’s stock option plan . . . On August 6, Magdaleno Albarracin Jr., a member of the board of Trans-Asia Oil and Energy Development Corp., bought 2,000 shares at P2.35 each and 48,000 shares at P2.40 each. The acquisition increased his holdings to 8.7 million shares, or 0.2 percent.

    Dividend policy. Starting this year, Megawide Construction Corp. is distributing as dividend either in cash or in stock, 20 percent of “prior net income,” but “subject to contractual obligations.” It did not explain in a filing what these “contractual obligations” are and how these would affect its 20-percent dividend policy.

    To illustrate, here is a sample computation: 20 percent of Megawide’s net profit of P1 billion in 2012 equals P303.9 million. This would leave the company with P708.2 million in untouched profits that would remain as part of its surplus or retained earnings.

    As of March 31, 2013, Megawide, which recently declare a 30-percent stock dividend, had total equity of P5.1 billion consisting of P1.1-billion outstanding capital based on P1 par value, P2-billion additional paid-in capital (APIC) and P2-billion retained earnings.

    Unusual surge. Ferdinand Masi, president of Suntrust Home Developers Inc., said that the stock’s price surged to P0.85 each share from P0.57 at 11:46:15 a.m. on August 14, possibly because of the company’s stock rights offering.

    In a filing posted yesterday at the Philippine Stock Exchange website, Suntrust said that a stockholder is entitled to subscribe to 2.5 shares for every share he or she owns at P1 par value.

    Under Securities and Exchange Commission rules, additional issuance of shares should be priced at a minimum of the stock’s par value. Suntrust is, in fact, being more generous by requiring initial payment of only 25 percent of total subscription with the balance payable on call by the board, but not later than three years from the date of ratification by stockholders.

    P20-B capital hike. Should the entire rights offering be fully subscribed, Suntrust would increase its outstanding capital by 5.6 billion shares to 7.9 billion from 2.2 billion as of June 30, 2013. The company is raising its authorized capital stock by 20 billion shares to 23 billion shares.

    After the stock rights offering, the company would still have 15.1 billion shares that it could sell to investors to raise money for “various investment opportunities.”

    Suntrust is a property company that belongs to the group of companies controlled by businessman Andrew Tan. Many years ago, it used to be known as BW Resources Corp. (BWRC). Remember the now infamous BW scandal, one of the reasons for the impeachment of President Joseph Ejercito Estrada, now mayor of Manila?

    Back to gaming? If Suntrust goes into gaming venture, then businessman Stanley Ho, also known as Ho Hung Sun, of Macau, would finally be a stockholder of a gaming business that has made him famous.

    Ho is one of the significant stockholders of BWRC, which became Fairmont, then finally assuming the present corporate identity. He maintained his holdings in Suntrust despite the change in its business activity to property.

    With his direct holdings of 116.1 million shares, he is entitled to buy 290.2 million new shares, or P290.2 million. Should he avail himself of the stock rights offer, he would initially pay P72.5 million, which is the equivalent of 25 percent of his total subscription.

    If Suntrust goes into casino operation, will Ho, former chairman of Fairmont, be contented with owning a minority stake? The company’s disclosures are worth watching for the Macau businessman’s next move.

    esdperez@gmail.com

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