The Philippine Stock Exchange plans to set a P5-billion minimum offer size for companies that plan to conduct an initial public offering via preferred shares.
It said the proposed rule on initial listing through preferred shares offering would enable companies to tap the stock market and raise funds through preferred shares offering, without listing their common shares.
“The proposed rule will give issuers flexibility to structure a fundraising structure that is best suited to their business operations and strategies while providing the investing public the opportunity to participate in the economic benefits as shareholders,” the PSE said.
It said the proposed rule was benchmarked against the rules of other exchanges such as the Singapore Exchange, Australia Stock Exchange, New York Stock Exchange and Taiwan Stock Exchange which all allow listing of preferred shares only.
Aside from minimum offer size of P5 billion, the proposed rules provide that companies applying for initial listing of preferred shares have at least 1,000 public stockholders, each owning stocks equivalent to at least one board lot.
This will be the minimum public ownership requirement applicable for companies, instead of the 20-percent public float requirement for companies with listed common shares.
It said holders of preferred shares could also exercise voting rights with respect to the fundamental corporate actions specified in the Revised Corporation Code.
The PSE said it considered companies which were already operating but preferred not to offer common shares until their full income earning potential was realized.
“Thus, PSE would like to offer these companies the option to tap the stock market for funding via the issuance of preferred shares, without the listing of their common shares,” the local bourse said.