Will the Sorianos take Phelps Dodge public?

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Emeterio Sd. Perez

Emeterio Sd. Perez

THE Sorianos will meet the public stockholders of A. Soriano Corp. (Anscor), their holding company, on April 15 to report the contribution for the first time of Phelps Dodge International Philippines (PDP) to its revenues and profits as a 100 percent-owned subsidiary. Their report will serve as the highlight of Anscor’s annual stockholders’ meeting, especially if the Sorianos would announce that they plan to make Phelps Dodge public by selling shares to the public and make it a listed company.

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In December 2014, Anscor made what could be one of the biggest local acquisitions, if not the biggest, made by a listed company when it bought the shares owned by General Cable Co. Ltd. in PDP. By paying $67.1 million for the 40 percent stake of General Cable in PDP and its 0.2 percent stake in Phelps Dodge Philippines Energy Products Inc. (PDEP), Anscor ended up owning 100 percent of the two companies.

In a posting on the Philippine Stock Exchange (PSE), Anscor said it borrowed from a local bank its “additional investment” in PDP. In turn, Phelps Dodge contributed P535.5 million to Anscor’s consolidated net profit in 2014.

Phelps Dodge’s profitability last year resulted from revenues that increased 14 percent from the year earlier level to P6.6 billion.

Ownership profile
Anscor Consolidated Corp. (ACS) is one of the wholly owned subsidiaries of Anscor, which is the flagship listed holding company of the Soriano family. At the same time, it is also the majority stockholder of its mother company because it owns 1.3billion Anscor common shares, equivalent to 50.3 percent of 2.5 billion outstanding common shares, which are all listed on the PSE.

In a public ownership report (POR), Anscor divided ACS’s holdings into 902.2 million directly owned common shares and 355.6 million indirectly owned common shares. Ironically, it listed ACS as one of four affiliates and not a wholly owned unit as it did in another PSE posting.

Instead of listing ACS in its POR, Anscor listed two principal stockholders—AZ Asia Ltd. Philippines and ATR Kim Eng Securities, which hold 176.6 million common shares, or 7 percent, and 439 million common shares, or 17.6 percent, respectively.

In its public ownership report, Anscor divided its 2.5 billion outstanding common shares into 2 billion non-public shares and 471 million, or 18.8 percent, public shares.

Pay and perks
As chairman and chief executive officer, Andres Soriano 3rd heads the list of Anscor’s five highest-paid executives who, as a group, received P76.5 million in 2013. Their total compensation consisted of P51.5 million in salaries, P1.17 million in benefits, and P23.8 million in bonuses.

In a previous compensation filing, Anscor said that in 2013, it paid Soriano and four other top executives a total of P77.7 million in salaries, benefits, and bonuses.

In 2014, Anscor raised the group’s total compensation by 21 percent to P92.6 million divided into salaries, P53.496 million; benefits, P1.447 million; and bonuses, P37.75 million.

Anscor said the total compensation of its top five executives in 2015, based on estimates, may top P100 million at P113.6 million divided into salaries, P53.8 million; benefits, P1.5 million; and bonuses, P58.3 million.

I purposely did not get the average pay by dividing the annual compensation by five because the results of the computation would not be fair to the members of the group who may be receiving much less than those at the top of the ladder. In other words, some people are more blessed than others.

Aside from Soriano, the four other highest-paid executives are younger brother Eduardo J. Soriano, vice chairman and treasurer; Ernest K. Cuyegkeng, executive vice president and chief financial officer; Narcisa M. Villaflor, vice president and comptroller; and Joshua L. Castro, assistant vice president amd assistant corporate secretary.

The “other directors” of the seven-man board – only four of them – were paid P10.7 million, or P2.7 million each, in 2013; and P13.5 million, or P3.4 million each, in 2014 and will be paid P19 million, or P4.7 million each, this year. The four are Jose Ibazeta, John Gokongwei Jr., Oscar Hilado and Roberto Romulo.

esdperez@gmail.com

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