Philippine National Bank (PNB) is planning to issue shares of its real estate subsidiary PNB Holdings Corporation as property dividends to make it eligible for listing by way of introduction.
In a disclosure to the Philippine Stock Exchange, PNB said its Board of Directors has approved the declaration of shares of PNB Holdings as property dividends effective May 18, 2021.
Earlier this year, PNB obtained regulatory approval to make additional investments in PNB Holdings Corporation in exchange for certain properties of the bank.
“The investment into PNB Holdings and the dividend declaration are two important phases of the bank’s strategic initiative to recognize the unrealized value of its three major properties,” PNB said.
The prime properties are the PNB Financial Center in Pasay, PNB Makati Center in Ayala’s Central Business District, and the Prime Property at the corner of Buendia Avenue and Paseo De Roxas, also in Makati.
PNB said it is pursuing plans to reduce its low-earning assets to build up its financial position. PNB Holdings increased its authorized capital stock to reflect the value of the three prime properties.
“The timing of the development of these properties are already being studied by the real estate experts, who are already working closely with PNB Holdings Corp. and PNB,” PNB President and CEO Wick Veloso said.
He added that, “The distribution of PNB Holdings shares through the dividend declaration allows PNB stockholders to share from the benefit of the realized values of the properties and any future valuation gains.”
Property dividends occur when a company declares and distributes assets other than cash, such as shares of stocks in a company’s subsidiary or affiliate or tangible products of the company.
Through the distribution of PNB Holdings Corporation shares via the declaration of the property dividends, all shareholders of PNB will become part owners of PNB Holdings, allowing them to benefit from future potential gains from the development of the properties, either through potential dividends and/or through the increase in the valuation of the shares.
Having the same wide subscriber base as its parent company, PNB Holdings Corporation will be eligible for listing by way of introduction as the PSE. This means it can list its shares without an initial public offering since it already meets the minimum public ownership requirement.