By Honey Madrilejos-Reyes
Reporter
THE Philippine Stock Exchange (PSE) will initiate talks with government agencies, apart from the Board of Invesments (BOI) and Department of Energy, to assist them in encouraging private companies to go public.
At the sidelines of the third-quarter stock market briefing on Friday, PSE president Francis Lim said the bourse would sit down with the National Telecommunications Commission (NTC) to discuss the much anticipated listing of Smart Communications Inc., the largest wireless company and the most profitable subsidiary of the Philippine Long Distance Telephone Co. (PLDT).
"I believe there is a provision in the NTC rules requiring telecommunication firms to embark on a public offering. We will look into that," Lim said.
Last week, the NTC asked Smart to explain why it has not complied with a requirement of the Public Telecommunications Act Policy Act, mandating telecom companies to sell part of their shares to the public.
Under Smart's franchise, it was supposed to conduct an IPO no later than August 2004. However, its parent company said Smart has not violated any rule.
"Since PLDT is the most widely held publicly listed company in the Philippines, both in terms of common and preferred shares, the state policy of encouraging public ownership of both PLDT and Smart to the widest extent possible has already been achieved," it said.
The PSE has long been eyeing Smart to do an IPO given its attractiveness and its ability to provide liquidity in the stock market. However, the so-called "chain-listing" rule of the exchange has been preventing an IPO from happening.
The chain-listing rule states that a subsidiary, or parent company, of a listed firm will not be considered suitable for listing if its assets and operations are substantially the same as those of the already listed firm.
This rule has also been cited by PLDT a number of times for not listing Smart shares at the bourse.
According to Lim, however, the PSE may have amend the chain-listing rule to accommodate the entry of Smart and other companies that may be covered by such rule.
Nevertheless, "If there's a provision in the NTC rule providing for the listing of telco companies, then the exchange's chain-listing rule could be overruled," Lim said.
Apart from the NTC rule, Lim said there are 70 more laws that mandate public offering. The PSE's hope is to make use of these laws to see more companies listing at the bourse.
BOI director for legal department Pascual de Guzman said they have short-listed 85 firms, which are ready to go public. The list has already been given to the PSE for evaluation.
Most of these BOI-registered companies, de Guzman said, are foreign-owned with interest in chemicals, agriculture, oil and energy.
Business Mirror
October 30, 2006
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