SAN Miguel Brewery Inc. (SMB) is all but ready to proceed with voluntary delisting from the Philippine Stock Exchange (PSE) given the decision of its two biggest stockholders not to sell shares to meet the public ownership rule of the bourse. But it seems Ramon S. Ang, president of SMB’s controlling shareholder San Miguel Corp. (SMC), still has a card left to play.
In a chance interview with reporters late Monday, Ang refloated a plan for SMB to issue preferred shares which, he said, the PSE should count along with the company’s common shares in calculating ownership if the plan pushes through.
“They should combine common shares and preferred shares [in the calculation],”Ang said in Filipino. “They are both listed anyway.”
Ang had previously hinted at the possibility of SMB selling preferred shares to meet the ownership requirement but gave no details on the size of the deal or the timing of the offering.
Should it sell preferred shares, Ang said SMB will be compliant with the 10 percent minimum public ownership requirement.
The company executive suggested this route given that his recent meeting with SMB’s other major shareholder, Japan-based Kirin Holdings, confirmed it was unwilling to reduce its more than 48-percent stake in the Philippines’s largest beer maker.
The remaining 51 percent of SMB is held by SMC, leaving only 0.6 percent in hands of the public, well below the minimum 10 percent required by the PSE.
The easier solution, market analysts had said, is for both sides to reduce their holdings but this is also where the problem lies. SMC does not want to fall below a controlling position, while Kirin—which is seeking to tap Southeast Asia’s robust growth amid slowing beer sales at home—is apparently happy with its investment in SMB.
“It might make sense, if they were to issue and list a large amount of preferred shares,” Jose Lacson, research head of Campos Lanuza and Co., said in a phone interview on Tuesday. “But the risk is it might create a precedent for some other companies. The PSE will have to study this very carefully before they allow it.”
“The spirit of having the 10-percent [public float] rule is to free up volume and liquidity,” he added.
The PSE did not immediately respond to a request for comment, however, bourse president Hans Sicat indicated earlier there is no intention to extend the deadline for listed firms to meet the minimum public float requirement.
The PSE has given noncompliant firms until the end of the year before it starts suspending these companies.
SMB shares did not move at P33.90 each, giving it a market value of P522.4 billion on Tuesday. Its removal from the exchange, after going public just four years ago, could hurt the PSE in terms of market capitalization but Sicat said he is more focused on boosting trading volume.