XURPAS Inc., a technology provider, has authorized capital of 5 billion common shares of which 1.72 billion shares are outstanding. The website of the Philippine Stock Exchange (PSE) shows that all outstanding shares were listed on Dec. 2, 2014 and defined 19.8 percent of these shares as “free float.”
The percentage makes Xurpas more public than others because the rule requires a minimum public ownership of only 10 percent of outstanding capital.
(Note: The Securities and Exchange Commission remains silent on the definition of the 10-percent minimum public ownership rule as to whether this covers the entire capital stock and not limited to common shares.)
A public ownership report (POR) showed the same percentage (19.8 percent) but listed the equivalent number of shares—341.32 million —which it classified as public, and 1.38 billion shares as “total number of non-public shares,” or 80.156 percent.
Apparently, Xurpas’ POR classified its employees’ 5.5 million shares also as public. Minus these insider holdings, the publicly owned shares would be reduced to 335.82 million, or 19.5 percent.
The significant stockholders and few employees of Xurpas are lucky to have bought their shares at the par value of P1, which it changed to P0.10 per share on Sept. 3, 2014.
Xurpas went public in December last year by selling 344 million shares to the public at P3.97 per share.
Due Diligencer computed the ownership profile of Xurpas before and after the company’s IPO. By subtracting 1.37 billion (the number of shares originally owned by insiders) from 1.38 billion (the total number of non-public shares in Xurpas’ public ownership report), the result showed a difference of 8.18 million shares which possibly went to select insiders.
Did the more than 8.18 million shares that certain Xurpas insiders acquire come from the 344 million IPO shares? Did these insiders also pay P3.97 per share?
Due Diligencer does not have the answer.
Top 100 stockholders
As far as the rules on ownership are concerned, the beneficial owners of listed shares held by PCD Nominee Corp. would remain only as record stockholders.
The list of Xurpas’ top 100 stockholders as of Sept. 30, 2015 credited PCD Nominee with a total of about 344 million Xurpas shares, or 20 percent, of which 203.76 million, or 11.8 percent, belonged to Filipinos and 140.2 million shares belonged to foreigners.
Incidentally, Xurpas reported only a few individual stockholders so that it could not complete the top 100 list of stockholders. Aside from PCD Nominee which occupied the fourth and fifth slots, the other stockholders included 17 individuals led by Fernando Jude F. Garcia, Nico Jose S. Nolledo, and Raymond Gerard S. Racaza, with P441.67 million worth of shares, or 25.7 percent, each.
The “less significant” stockholders were Jose Vicente T. Colayco and Alfonso A. Tagaysay, 22.75 million shares, or 1.3 percent, each; Vanessa V. Barrameda and Ella C. Malapitan, 2 million shares, or 0.12 percent, each; Estrelita B. Laban, 1 million shares; and Sarah Maesa M. Espina, 500,000 shares. Mercedita S. Nolledo and Wilfredo Oposa Racaza owned 1,060 shares each.
As of April 15, 2015, Xurpas’ public ownership report showed Nolledo and Alvin D. Lao held 1.7 million shares, or 0.09 percent, and 1 million shares, or 0.06 percent, respectively. They used to hold 10 shares each.
Here are some significant numbers that may be of interest to the public:
1. Xurpas sold 344 million shares via an IPO but its public ownership report credited the public with only 341.32 million shares, or 19.8 percent, including 5.5 million shares held by four employees who are insiders.
2. At P3.97 per IPO share, Xurpas grossed P1.37 billion that could have resulted in additional paid-in capital of P1.33 billion. It reported P1.2 billion APIC as of Dec. 31, 2014 and Sept. 30, 2015.
3. Xurpas reported retained earnings of P98.5 million as of Dec. 31, 2014; P105.2 million as of Dec. 31, 2013; and P25.5 million as of Jan. 1, 2013. It reported retained earnings of P266.24 million as of Sept. 30, 2015, including net income of P167.7 million in three quarters. Minus P68.8 million dividends payable to the company’s original stockholders, Xurpas’ unappropriated retained earnings amounted to P197.44 million.
4. Before taking their company public by selling 344 million shares, Xurpas declared dividend after dividend. In case of stock dividend, the company has been increasing its authorized capital stock to accommodate the distribution of shares to pre-IPO owners.
For instance, the company amended its Articles of Incorporation to reflect the increase in its authorized capital to P255 million from P10 million. Of the increase, it declared P61.25 million in stock dividend and collected the balance in cash.
A series of computations showed Xurpas’ generosity to its pre-IPO stockholders who received P300 million in dividends either in cash or in stock.
Meanwhile, the public stockholders have yet to experience the kind of generosity that Xurpas has been extending to its original stockholders before it sold its IPO shares at P3.79 each.