Stock Commentary: Phinma to sell P281 million in treasury shares
Phinma Corp [PHN 19.94] [link] announced board approval for the sale of 14,450,179 treasury shares at a minimum selling price of P19.50/share.
At that price, a complete sale of the treasury shares would bring in a little over P281 million for PHN.
Technically, PHN’s “Executive Committee” approved the sale, but they did so with delegated authority from PHN’s board of directors.
The company will ask shareholders to waive their pre-emptive right to a follow-on offer or stock rights offer at the same price.
Treasury shares are kind of a weird animal, in that they were shares that were once authorized and issued, but were since re-purchased or otherwise re-acquired by the company.
When an outstanding share becomes a treasury share, it sits there as an asset that the board can sell to raise money, but while in the treasury shares account, the treasury share can’t vote, can’t receive dividends, and doesn’t count toward the calculation of proportional ownership.
Once the board sells treasury shares, as the PHN board appears ready to do here, the shares are once again considered “issued and outstanding” and regain their right to vote, receive dividends, and count toward proportional ownership.
The sale of these treasury shares will increase PHN’s outstanding shares by 5.3%. So, not a huge deal, but not a “nothing” either.