PSE allows more funding options for raising capital

MANILA, Philippines — The Philippine Stock Exchange (PSE) is giving companies more options to raise capital from the market.

Under its proposed rules, the PSE is looking to allow companies to tap the market for funding via the issuance of preferred shares without listing of their common shares.

This is for companies which are already operating, but prefer not to offer common shares until their full income earning potential is realized, the PSE said.

“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.

Preferred shares are shares with no voting rights while common shares have voting rights.

Holders of preferred shares can also exercise voting rights with respect to the fundamental corporate actions specified in the Revised Corporation Code.

In view of the foregoing considerations, the exchange proposes to adopt a rule allowing the initial listing of preferred shares of an issuer, without the listing of its common shares.

The requirements for initial listing under the PSE Listing Rules shall apply to companies that will offer and list only preferred shares. The offer size shall be at least P5 billion.

For the minimum public ownership requirement, the PSE said that upon and after listing, the applicant company shall 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 to issuers instead of the 20 percent MPO requirement, which is determined based on the outstanding and listed common shares in public hands,” the PSE 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.