eTelecare stock delisting nears as parties finalize sale to Ayala

MANILA, Philippines - Shares of US-based business process outsourcing (BPO) firm eTelecare Global Solutions, Inc. will be delisted from the New York and Philippine stock exchanges as the company’s acquisition by an Ayala-led group is finalized. In a disclosure Monday, the company told the local exchange its board had approved the delisting of the shares from the local market and the NASDAQ index. This follows the completion of the company’s sale to EGS Acquisition Co. LLC, a firm created by Ayala Corp. and US-based partner Providence Equity Partners, Inc. In September, Ayala Corp. said it was buying, together with its partner, eTelecare shares for $9 apiece. This was an 80% premium over its share price of around $5 at that time. The outsourcing company first went public when it issued American depositary shares — dollar-denominated shares of foreign companies that are traded in the US — on the NASDAQ Global Market. It also listed its shares on the Philippine Stock Exchange without necessarily selling these to the public in November last year. Its so-called listing by introduction is a good way to gain reputation since listed firms are under strict regulations. Ayala Corp., through its BPO investment arm LiveIt Solutions, Inc. has a 22% stake in eTelecare. With the acquisition, its stake in the company is expected to go up to half. In the disclosure, the BPO company said LiveIt President Alfred I. Ayala would be named co-president of eTelecare, together with Julie Richardson, the managing director of Providence Equity LLC, an affiliate of Providence Equity Ventures. In an earlier disclosure, the acquiring group said it had bought 98.7% of the company, or close to 29.3 million eTelecare common shares. Grace Cerdenia, chief operating officer of online brokerage 2TradeAsia, said eTelecare’s decision to delist was understandable, since very few of its shares would be tradable anyway. "If youre shares are not really that tradable, then there is no sense to keep it on the market," she said in an interview. She said typically, the ideal amount of listed shares would be around 20% to 30% of a company’s total stock. Expenses linked to the partnership and the set up of a new site in Latin America had contributed to the company’s profits dipping by two-thirds in the third quarter. Last month, the company said its profits for the July to September period had dropped to $1.6 million, or 67% less than its net income last year. — Paolo Luis G. Montecillo, BusinessWorld