PSE ready to expel Sobrepeña’s Metro Global from bourse

The local bourse may see another delisting this year after the Philippine Stock Exchange (PSE) warned that Metro Global Holdings Corp. may be automatically delisted for not meeting the minimum public ownership (MPO) requirement.

In a memorandum posted on Tuesday, the PSE said the Sobrepeña-led holding company for property and infrastructure development remained “noncompliant with the amended MPO rules.”

Under the rules, publicly listed companies must have a minimum public float of 10 percent to remain on the bourse. Once a company’s public shares fall below the threshold, it will have six months to increase the float before it is automatically, or involuntarily, delisted.

Trading of its shares has been suspended since 2007 after it asked the PSE for a voluntary halt to “realign its business and explore new strategic directions.”

The company, which first started in mining, issued in February this year an additional 750 million shares to Fil-Estate Management Inc., its controlling shareholder, to increase its authorized capital stock.This caused Metro Global’s public ownership level to drop to 8.67 percent.

“Should the company remain noncompliant with the minimum public ownership requirement after the lapse of the six-month period reckoned from Feb. 5, [Metro Global] shall be automatically delisted from the Official Registry of the Exchange,” the PSE said in its memorandum.

Third to exit

A company cannot apply for relisting within five years from involuntary delisting. Directors and executive officers are likewise disqualified from becoming part of any company applying for listing within the same period.

As a result of the delisting, minority shareholders and passive investors will be left with shares that could not easily be converted to cash. Although these can be sold outside the PSE trading system, over-the-counter transactions would be subject to higher capital gains tax.

The Inquirer reached out to Metro Global for comment but it has yet to respond.

Once delisted, Metro Global will be the third firm to exit the bourse this year, after Premium Leisure Corp. and Cebu Holdings Inc.

In April, the PSE said it would boot out Abra Mining and Industrial Corp. after the Securities and Exchange Commission found that the company, through some of its officials, had illegally sold unlisted shares from 2015 to 2019.

The PSE has yet to announce updates on the Beloy family-led firm’s delisting process.

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The bourse’s notice on Metro Global also came on the listing day of NexGen Energy Corp., the third company to debut on the stock market this year.

Analysts have said that the PSE may not reach this year’s goal of six listings, for a total equity deal of P40 billion, mostly because potential initial public offering (IPO) issuers were waiting for better market conditions.

‘Self-fulfilling prophecy’

However, PSE president Ramon Monzon said if a company “has a good story and it needs capital to pursue its development or expansion plans, [it] is the appropriate time to list your company.”

“The more companies that defer their IPO plans because of what they call poor market conditions, the more poor market conditions become a self-fulfilling prophecy,” Monzon said during NexGen’s listing ceremony on Tuesday.

So far, three highly anticipated IPOs have been deferred due to “volatile market conditions”: Sy family-led SM Prime Holdings Inc.’s real estate investment trust, Razon-led Prime Infrastructure and Ayala-backed e-wallet platform GCash. —WITH a report from ERICA ANN C. VILLASORDA