Delisting halts trading of telco shares at bourse

By Riza Lozada

Liberty Telecoms Holdings Inc. (LIB) shares have stopped trading at the bourse following the firm’s voluntary delisting as a result of the P70-billion megadeal involving Philippine Long Distance Telecommunications Inc. (PLDT), Globe Telecoms and San Mi­guel Corp. (SMC) in which assets of LIB, which is a unit of SMC, were in­volved.

The Philippine Stock Exchange (PSE) said in a press statement that the bourse suspended the trading of LIB shares after its public float dipped below the 10-percent minimum re­quirement on listed companies.

The requirement is in accordance with the PSE’s Amended Rule on Minimum Public Ownership.

The decrease in LIB shares avail­able to the public was a result of the block sale in the market on Novem­ber 4 for the acquisition of the shares tendered by minority shareholders in connection with the voluntary delist­ing procedure that LIB was pursuing.

LIB previously announced the cross date of the tendered shares and the subsequent trading suspension through a disclosure to the PSE.

“While we encourage companies to continue to be listed, we respect the business judgment of listed com­panies to go private. Furthermore, we are in communication with the rele­vant regulatory agencies as regards the said transaction,” PSE Chief Op­erating Officer Roel Refran said.

LIB embarked on a tender-offer exercise from August 24 to October 20, 2016, following its petition for voluntary delisting. The petition for voluntary delisting and all other infor­mation related to the company’s ten­der offer were disclosed by LIB to the public.

The company’s proposed date of delisting is on November 21, 2016, subject to the approval of the PSE.

However, minority sharehold­ers of a delisted company could still transact through the over-the-counter market, and not through the facilities of PSE.

The Securities and Exchange Commission and the PSE were ear­lier asked to conduct a much wider probe on the subject of the disclosure requirements being asked of LIB, whose tender offer shares were de­ferred pending further inquiry into the telco megadeal.

LIB earlier did not report the transfer of its bandwidth assets to both the PSE and the SEC, as SMC maintained that there was no as­signed value to the transaction.

Refran and the SEC’s Offi­cer-in-Charge of the Office of the Commission Secretary Amando A. Pan Jr. said a review is ongoing.

The SEC’s Markets and Securi­ties Regulation Department (MSRD), in particular, is probing the supposed failure of LIB to disclose the informa­tion to the investing public.

LIB transferred the frequencies it owns to BellTel, another SMC unit under Vega Telecoms, in March 2015, but made no mention of the transac­tion until it was included in the com­pany’s latest quarterly report, which was posted on the PSE web site on Aug. 15.

The SEC requires, among oth­er things, the submission of “current reports on significant developments” deemed necessary to keep informa­tion on the operation of the business, and the financial condition of security issuers updated.

For its part, the PSE requires is­suers to “promptly make available all information, through the submission of structured and unstructured dis­closures, that would enable a reason­able investor to determine whether to buy, sell or hold securities, or in con­nection with the exercise of related voting rights.”

When asked for an explanation on the non-disclosure, SMC said in a letter to the SEC dated Sept. 8, 2016, that it considered the assignment of frequencies “soft information” that did not have to be disclosed since its Unified Rollout Plan was never final­ized or approved.

Under the PSE and SEC rules, any listed company, or one whose shares are being bought and sold in the stock market by the investing public, has to report any information that is considered material or one that could cause any increase or decrease in its share price.