Tubig Pilipinas Holdings Inc. (TPHI) has encountered yet another trading suspension from the Philippine Stock Exchange (PSE) following its controversial backdoor listing move. After acquiring Tubig Pilipinas Group Inc. (TPGI) via a share swap, TPHI's public float has plummeted, raising alarms among investors and regulators alike.
The company's recent transformation from a dormant coal shell into a water utility holding firm was initially celebrated. However, the share swap resulted in a drastic dilution of TPHI's public float from 28.31% to 10.64%, falling significantly below the required 20% threshold mandated by the PSE. This triggered an immediate trading halt that complicates TPHI's efforts to regain investor trust.
Regulatory Pressure and Market Reactions
The exchange’s trading suspension sends a sharp counter-signal: the market will not wait that long.
Val A. Villanueva, Business Journalist
Under PSE rules, TPHI has a six-month period to rectify its public float. Failure to do so could lead to automatic delisting. The clock is ticking, and TPHI has indicated a plan for a follow-on public offering within a year of completing the swap, but market conditions may not align with its timeline.
- TPHI issued 66.46 billion new common shares at P0.10 each to acquire TPGI.
- The acquisition valued at P6.646 billion has raised skepticism due to high multiples relative to revenue and equity.
The challenges do not stop here. The valuation of P6.646 billion for TPGI, which recorded losses in recent years, raises critical questions about the financial health and future profitability of TPHI. Investors are urged to scrutinize the company's next moves closely.
As TPHI navigates these turbulent waters, minority shareholders are left in a precarious position, legally barred from trading their shares while the company works to restore its public float. The ongoing situation highlights the complexities and risks associated with backdoor listings in the Philippine market.