| THE board of directors of the National Reinsurance Corp. of the Philippines, or PhilNaRe, has revoked an earlier decision to declare a 7-percent stock dividend amounting to P152.7 million.
It was replaced with a 7-percent cash dividend of the same amount.
The cash dividend, equivalent to about P0.07 per share, will be paid to stockholders on record as of July 16, 2007 this coming August 6, 2007. The dividend will come from the corporation’s unrestricted retained earnings as of December 31, 2006.
Chief financial officer John Huang, in a statement, explained that “the Board felt that a cash dividend—as opposed to a stock dividend—would be immediately and directly beneficial to our existing shareholders.
This would also be a way of thanking the investing public for their support and belief in the company.”
With a net income of P275 million last year, which is 178-percent higher than their P99-million net income in 2005, the company felt that giving out a cash dividend would be a better option to cap the company’s performance in 2006, highlighted by the merger with Universal Malayan Reinsurance Corp. that boosted reinsurance premiums by 46 percent from P2.6 billion in 2005 to P3.8 billion last year.
PhilNaRe was listed on the Big Board of the Philippine Stock Exchange last April 27. It traded strongly on the first trading day to close at P4.50, up 18 percent from the offer price of P3.80.
The shares peaked at P5.00 before succumbing to profit taking, with a total of 179.75 million shares, worth P832.6 million, changing hands at the close of its first trading day.
PhilNaRe has a market capitalization estimated at P9.9 billion, said Eduardo Francisco, president of issue manager BDO Capital and Investment Corp.
National Reinsurance raised a total of P2.8 billion from its IPO. The reinsurer said the proceeds will be used to expand its retention capacity. With a larger retention, the company has greater chance to gain international rating as an acceptable reinsurer. This would, in turn, allow the company to become a significant player in the multibillion-dollar Asian reinsurance market.
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