BDO Leasing and Finance Inc. credited measures to temper costs for its turnaround in the first quarter of the year ending March: the financial intermediary posted a net income of P83 million from a P24-million loss last year.
“The results reflect successful measures undertaken to address margin compression, which dragged down its financial results in 2019,” the company said. Margin compression occurs when the input costs to deliver a service rise faster than its sales price.
According to BDO Leasing, measures were able to address margin compression as evidenced by gross revenues reaching P696 million, while total expenses dropped by 30 percent to P569 million, largely due to the 52 percent drop in interest and financing charges as funding costs normalized.
Earlier this year, BDO Leasing’s parent BDO Unibank Inc. agreed to sell its 88.54-percent stake in the company to a group led by Luis N. Yu, one of the owners of 8990 Holdings Inc. The latter’s business is in mass housing.
Yu is buying 33 percent of BDO Leasing, while Vittorio P. Lim will buy 33 percent; Victor Y. Lim Jr. will acquire 4 percent and the remaining 18.54 percent will be by third-party buyers.
The company already announced that it will change its articles of incorporation and by-laws to reflect the change in name and purpose of the firm from a leasing company to a holding company.
The Securities and Exchange Commission earlier suspended the registration statement (RS) of BDO Leasing as a listed company after its primary business will be changed with the sale of most of the company to the Lims and Yus.
Included in the suspension by the SEC Markets and Securities Regulation Department (MSRD) are BDO Leasing’s order of registration and permit to sell securities. The SEC MSRD said it acted so after finding that the information contained in the main document “has become materially incomplete and inaccurate.”
“The MSRD particularly noted the disclosure of [BDO Leasing] that there would be a change in its primary business, from leasing and finance to a holding company, as a consequence of BDO Unibank’s sale of its controlling stake in [BDO Leasing] to a third party,” the regulator said.
“The MSRD finds that the suspension of the RS is consistent with public interest and protection of investors as the RS is materially incomplete and inaccurate and, if left unchecked, would tend to work a fraud on investors,” it added.
Shares of BDO Leasing was last traded on January 24 and closed at P3.16 apiece.
According to the SEC, under Rule 14 of the 2015 implementing rules and regulations of the Securities Regulation Code, a company needs to file an amended registration statement if it had major change in the primary business of the issuer, reorganization of the company and an increase in risk on the investment or on the securities covered by the registration.