Citicore Energy REIT provides refund procedure to investors affected by oversubscribed PSE EASy tranche
In confirmation of reports from Barkadans, Citicore Energy REIT [CREIT 2.55 pre-IPO] disclosed the process for PSE EASy refunds, implying that the PSE EASy tranche of the IPO was indeed oversubscribed.
One rumor I heard from a source said that the total issuance was 2x oversubscribed, but we’ll have to wait for official confirmation.
CREIT’s disclosure amended the refund provisions of the IPO to allow for “direct-to-broker” refunds to be processed for investors that purchased shares through Abacus Securities, COL FInancial [COL 4.04 0.25%], First Metro Securities, and Unicapital Securities.
This means that investors that have used one of these four brokerages as their registered “trading participant” will be able to receive their PSE EASy refund for unallocated shares directly to their brokerage account.
For all other investors, refunds will be made by way of a physical check which may be picked up in Makati from Professional Stock Transfer, Inc., starting on February 22. Checks that have not been claimed by March 24 (30 calendar days after February 22) will be mailed to the investor’s registered address (“at the Applicant’s risk”).
MB BOTTOM-LINE
This is only the second IPO to require mass refunds to be issued as a result of the PSE EASy tranche becoming oversubscribed.
The first, AllDay Marts [ALLDY 0.53 5.36%], revealed in late October of last year that the PSE and the brokers were completely unprepared to give money back to investors; the system, as constructed by the PSE and brokers, was optimized to take money from investors quickly and relatively painlessly, but the system just wasn’t ready to give that money back in the same fashion.
Last-minute accommodations were made and investors from 32 brokers were able to have their refunds processed “direct-to-broker”, but many were required to physically attend a single bank branch in Pasig to recover their refund check, and failing that, just wait and wait for the check to arrive in the mail.
Here, there are only four brokers (that we know of) accepting direct-to-broker refunds, meaning the number of refunds that must be processed physically could be very high, even compared to what happened with ALLDY.
I don’t know where to look for a solution to this obvious problem, but I hope that the PSE, the brokers, and the banks that bid for “receiving agent” jobs, somehow come up with something that treats retail investors with the respect that they deserve.
If the PSE chops the PSE EASy tranche from 10% to just 5%, as it wants to do, then these situations are almost guaranteed to happen with much more regularity.
Whether the solution comes from the “one-stop” online payment platform that the PSE is hoping to develop for PSE EASy, or some kind of obligation imposed on the brokers by the PSE to configure their systems appropriately to permit direct-to-broker payments and refunds, it almost doesn’t matter at this point. In this case, don’t let “perfect” be the enemy of “the bare minimum”.
If you are owed a refund and are unlucky enough to have used a broker that is not one of the four mentioned above, contact your broker and pressure them to sign-on to the direct-to-broker system.
As we saw with ALLDY, it’s absolutely possible for brokers to quickly sign-on. Just apply that pressure.
Demand more.
And if you don’t get the response you’re looking for, and investing in IPOs is something that you’re interested in, consider moving brokers to one that is willing to prioritize the safety and convenience of their clients.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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