The Securities and Exchange Commission (SEC) has given its go signal to the proposed listing rules for companies that bagged public-private partnership (PPP) projects at the Philippine Stock Exchange (PSE).
“In support of President Duterte’s programs to sustain economic growth, listing PPP companies at the bourse will provide additional source of funding for the projects,” the SEC said.
The PSE initiated the move to have separate listing rules and regulations for companies involved in PPP projects, in a bid to drive up the number of initial public offerings.
A company may apply for the said PPP listing if it, or a special purpose company incorporated just for the project, already bagged a contract. The said firm will be exempted from the three-year minimum track record and operating history requirement.
The minimum project cost should be at P5 billion, as indicated in its financial bid, but there will be no secondary offering, or existing shareholders of the PPP company are not allowed to offer their shares in the firm during the initial public offering period.
Firms, however, need to submit its business plan, which may include its plans for liquidation and winding up, or a proposal for a new business, at least three years before the scheduled expiration of the contract.
The PSE will have the power to delist any PPP company unless it submits documents that explain their ability to continue to operate, a clause that will be useful in case of pretermination of contracts or agreements that will not be renewed.
The said PPP listing initiative was a product of several roundtable discussions and consultations with public and private stakeholders on developing the capital markets for PPPs initiated by the PPP Center, the PSE, the SEC and the Asian Development Bank.
The PPP Center said earlier it plans to institute a framework to ensure the availability of long-term refinancing options to the private sector while ensuring that the government and the private sector’s contractual commitments and undertakings on the PPP project are not impaired.