MANILA – Lopez Holdings Corp has subscribed to its parent firm's Philippine deposit receipts (PDRs), allowing the listed company to acquire common shares in unit ABS-CBN Corp.
In a disclosure to the Philippine Stock Exchange, the listed holding firm of the Lopez family said it entered into a memorandum of agreement with Lopez Inc for its subscription to P1.5 billion worth of PDRs issued by the latter and that may be converted into 34.70 million common shares in ABS-CBN.
Lopez Holdings will source the funds to pay for the PDRs from internally generated cash and a short-term loan.
PDRs are financial instruments that allow foreigners to invest in companies, ownership in which is limited to Philippine nationals.
Last week, the privately held firm completed the P1.5-billion payment for the acquisition of 34.70 million common shares of ABS-CBN which were acquired for P43.225 each valuing the company at roughly P38 billion. The Securities and Exchange Commission earlier cleared the registration of the said ABS-CBN shares.
At end-September, Lopez Holdings held a 56.6 percent economic interest in ABS-CBN and 46.2 percent in First Philippine Holdings Corp (FPH).
Lopez Holdings posted a net income attributable to equity holders of P2.366 billion, 62 percent lower than the P6.185 billion registered in the same period last year, because of the absence of extraordinary gains.
Last year, FPH sold a 2.66 percent stake in Manila Electric Co to the group of businessman Manuel V. Pangilinan and registered a gain on business combination following the listing of Rockwell Land Corp. in May.
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