Crab mentality in the corporate world
Dan MarianoLAST month the Philippine Stock Exchange approved the application of Phoenix Petroleum Philippines, Inc. to list 145 million common shares with a par value of P1. The shares were to be sold for P9.80 each through an initial public offering.
An independent distributor of oil products, the Davao City-based Phoenix operates over 20 retail service stations all over the country. It plans to set up 30 more service stations by year’s end and expand its network to 140 stations by 2010.
Expansion was the reason that Phoenix decided to go public. Last Tuesday—the eve of its IPO—it was reported projecting to generate through the bourse P355.25 million, which it intends to use for its capital expenditures and working capital needs.
The following day investors grabbed as much Phoenix shares as they could. Minutes after the trading day began PNX stock was already at P13—up P3.20 or 32.56 percent from its IPO price—with 18 million shares changing hands. It actually rose as high as P14.
At the end of the trading week Friday PNX closed at P13.75—up 1.8516 percent—at a volume of 7,518,500 shares.
Phoenix’s offering is the third IPO in the country so far this year. It came on the heels of the highly successful offerings of Pacific Online Systems Corp. and National Reinsurance Corp. of the Philippines in April.
The strong performance of these companies’ IPOs has helped make our stock market one of Asia’s most vibrant. Moreover, it reinforced confidence in the Philippine economy as whole.
Cheap tricks
Yet, rather than cheer on Phoenix some quarters had resorted to some cheap tricks in their vain bid to derail its listing.
Phoenix is the country’s first petroleum company to go public since the oil industry’s deregulation in 1998. It has been in operation barely four years and yet has already managed to corner 5 percent of the Mindanao market and attract such clients as Cebu Pacific and Asian Spirit as well as international suppliers like PTT Thailand—Southeast Asia’s largest petroleum company—and Emarat, the Gulf’s leading manufacturer of petroleum products.
Despite Phoenix’s success—or perhaps because of it, the company has its share of detractors.
Some newspapers were unwittingly used when they reported on a complaint filed by Oilink International Corp. (Oilink), the oil supply company of Unioil Petroleum Phils., Inc., with the Securities and Exchange Commission against Phoenix.
The complaint, anchored on a case filed before the Davao City Regional Trial Court, alleges Phoenix committed an error in its registration statement when it stated that “there are no material legal proceedings pending or threatened against the company or in which property of the company is the subject thereof.” The complaint insisted Phoenix’s registration should be revoked.
Phoenix’s response to queries cut through the legal gobbledygook. It explained that the complaint is misguided, as Phoenix has nothing to do with Oilink and that it is Udenna Corp.—a shareholder of Phoenix—that is the subject of the complaint.
Industry insiders were surprised at the news reports because it is common knowledge the case used as basis for Oilink’s complaint had already been dismissed sometime back—for lack of merit.
More disturbing was the rumor that an SEC insider was responsible for leaking Oilink’s complaint letter to the press even before its validity was determined.
Botched deal
Industry analysts suspect Oilink and its owners are still smarting from the shelving of a planned partnership with Udenna. The venture would have allowed Oilink some presence in the growing markets of Mindanao but it reportedly failed to live up to its end of the deal. However, that is another story altogether.
It may be more prudent for Oilink, the oil supply company of Unioil, and its owner Paul Co, to pay more attention to the smuggling and tax-evasion case amounting to P315,885,623 filed against them by the government.
Another case filed by the Bureau of Customs against Oilink and its mother company Union Refinery Corp. also seeks the collection of P138 million in unpaid excise, ad valorem and VAT taxes incurred by the two firms due to oil importations from 1991 to 1995.
The government has given this case serious attention because of the amount involved and the allegedly brazen manner it was committed.
Justice Secretary Raul M. Gonzalez has declared that his department will pursue resolution of the complaints. Solicitor General Agnes Devanadera has also ordered state lawyers to closely coordinate with Customs on the matter.
