| Henry Sy onboard. From P0.72 on May 17, 2007, Mabuhay Vinyl Corp. (MVC) climbed 86.11 percent to P1.34 on June 19, 2007, a big jump in a month. The reason for MVC’s sudden surge may be the acquisition by Banco de Oro-EPCIB Inc. of 234,592,391 MVC shares as payment by Metro Alliance Holdings and Equities Corp. for unpaid loan. In foreclosing the MVC shares, which served as collateral for Metro Alliance’s loan, BDO, the banking unit of the SM group controlled by the family of businessman Henry Sy Sr., ended up as MVC’s single biggest stockholder with its newly acquired shares representing 34.082 percent of MVC’s 688,309,398 outstanding shares.
Dilution. Both MVC and Metro Alliance are controlled by businessman William Gatchalian, who is also known as the Philippines’s plastics king. Metro Alliance used to be MVC’s largest stockholder owning 293,266,654 shares, or 42.688 percent, which entitled Gatchalian to five seats in MVC’s 11-man board. It is bound to lose more MVC shares to BDO, when it remits to the lender additional 29,944,263 shares, or 4.350 percent, which served as security for the unpaid balance of the BDO loan amounting to P28 million. As provided for in loan agreement, Metro Alliance assured BDO of P28 million in cash dividend that would be declared by MVC. Since the dividend did not materialize, Metro Alliance will instead deliver to BDO 29,944,263 shares, as final payment, which will effectively reduce its ownership in MVC to 28.73 million shares, or 4.255 percent.
From competitor to coowner. BDO is now a costockholder of Mitsubishi Corp., which owns 39,679,999 MVC shares, or 5.77 percent, in Mabuhay Vinyl. The Japanese company also happens to be a stockholder of Ayala Corp. (AC). As a stockholder of Ayala Corp., the listed holding company of the Zobel family, the Japanese group is an indirect stockholder of Bank of Philippine Islands, (BPI) which BDO, after acquiring EPCIB, has dislodged as the Philippines’ second-biggest lender next to Metropolitan Bank and Trust Co. AC owns 21.331percent of BPI’s outstanding shares. In turn, AC list as its biggest stockholders Mermac Inc. and Mistsubishi group with 50.96 percent and 10.58-percent respectively of AC’s outstanding shares.
Buyback. Keppel Philippines Holdings Inc. (KPH) has 73,173,500 issued shares of which 60,425,419 are outstanding consisting of 38,730,970 common A shares; 21,694,449 common B shares; and 12,748,081 treasury shares. Such capital stock makes KPH the smallest company listed on the Philippine Stock Exchange (PSE) , with its paid-up capital much small than that of Makati Finance Corp., which is one of PSE’s three small and medium enterprises, with 80,687,187 outstanding shares. And KPH’s outstanding capital stock will continue shrinking as it keeps on buying back its shares in the open market. In its latest share buyback plan, KPH is targeting 2 million more shares, which will further reduce its outstanding shares to 58,425,419 shares and raise its treasury shares to 14,748,081 shares, equivalent to 20.155 percent of issued shares and 25.242 percent of outstanding shares upon the completion of the recent planned buyback program, which it will finance with its retained earnings of P25.016 million as of March 31, 2007. KPH spent P9.82 million in buying back 12,748,081 treasury shares, which translates to average price of P0.77. KPH common A shares reached a 30-day high of P2.50 and a month’s low of P2.42. Its common B shares peaked at P2.60 and dropped to P2.30 low in the last 30 trading sessions.
Victim of BW fiasco. Christine P. Base, corporate secretary of Multitech Investments Corp. (MIC) sold 10,000 shares at P5.80 on June 5, 2007, reducing her holdings to 233,910 shares, or 0.13 percent. A day after she made the sale, Multitech began climbing and closed at P7. It continued puzzling the market as it hit a high of P10.50 on June 19, 2007, or 81.034-percent higher than her selling price. Reacting to Multitech’s performance, the PSE asked Multitech to explain the stock’s unusual climb. As in the past, the usual reply was “we have no knowledge of any information that caused the increase of the share price of MIC today.” Base, who issued the explanation, should not really know. Otherwise, why sell at P5.80? Incidentally, Multitech was one of the victims of the price manipulation of BWRC. In September 1999, it invested P190,980,636 in 6,820,737 BWRC shares, renamed Fairmont Holdings, which is now Suntrust Home Developers Inc. As of March 31, 2007, it still holds 350,737 Suntrust shares “with a market price of P0.69 per share.”
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