PNB board approves property dividend issuance to shareholders

Lucio Tan-led Philippine National Bank (PNB) will be issuing property dividends in the form of shares of its holding firm to all its shareholders in a bid to liquidate low-earning property and strengthen its financial position.

In a disclosure to the Philippine Stock Exchange, PNB said its board of directors has approved the dividend declaration of up to 239,353,710 common shares of PNB Holdings Corp. with a par value of P100 per share, to all stockholders of record as of May 18, 2021, “subject to regulatory and other necessary approvals.”

“The property dividend shall be paid at a ratio of 0.156886919 shares of PNB Holdings for every one share of PNB,” the bank said.

“The ratio for property dividend was determined by dividing the total number of outstanding shares declared as property dividends of PNB Holdings, which is 239,353,710 common shares, by the total number of outstanding shares of PNB of 1,525,764,850,” it added.

PNB said it has earlier obtained regulatory approval to make additional investments in PNB Holdings in exchange for certain properties of the bank.

The bank said its 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, namely 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, in turn, 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,” said PNB president and CEO Wick Veloso.

“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,” said Veloso.

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 shares via the declaration of the property dividends, the Lucio Tan-led bank said all of its shareholders 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.”  —KBK, GMA News