The Philippine Stock Exchange on Thursday obtained the approval of the Securities and Exchange Commission to conduct a stock rights offering worth P3.1 billion, a key development that could finally facilitate the merger of the bond and stock exchanges.
SEC secretary Armando Pan said in a text message the regulator cleared local stock rights offering that could result in the reduction in stockbrokers’ ownership in the exchange to less than 20 percent as required under the Securities Regulation Code.
The PSE plans to offer up to 11.5 million common shares to eligible shareholders at a price of up to P275 per share.
The exchange plans to use the net proceeds from the rights offering to pay corporate debt, finance product development and fund capital expenditures.
The PSE set the offering period tentatively on Feb. 5 to 9 and the listing date on Feb. 23.
The planned rights offering is expected to reduce brokers’ ownership in the local bourse to less than 20 percent as required by the Securities Regulation Code.
PSE president Ramon Monzon earlier said the local bourse obtained pre-emptive rights that will not allow brokers and institutional investors to exercise the rights offering
The bourse earlier hired BDO Capital and Investments Corp. and First Metro Investments Corp. as the underwriter for the offering.
It also invited Shenzhen Stock Exchange to become a minority investor by buying shares in the rights offer.
The reduction in the brokers’s stake is one the requirements that SEC has asked before allowing PSE to take a majority stake in the bond exchange.
The PSE is buying a majority stake in Philippine Dealing System and Holdings Inc., which serves as the holding firm for fixed-income trading platform Philippine Dealing and Exchange Corp. (PDEx), Philippine Depositary and Trust Corp. and Philippine Securities Settlement Corp.