If the Bidders successfully own at least 95% of all MPIC common shares after the Tender Offer, the Company’s public ownership is expected to fall below the required minimum float of 10%, as mandated by the PSE.
According to the PSE’s Amended Rule on Minimum Public Ownership, listed companies failing to comply with the minimum ownership requirement may face suspension from trading for up to six months and, if non-compliant after the suspension period, automatic delisting.
Nevertheless, the Bidders have the intention of voluntarily delisting MPIC from the PSE after the Tender Offer’s completion, subject to the approval of the PSE.
Upon delisting, MPIC’s common shares will no longer be tradable on the PSE, which may possibly impact shareholders’ ability to sell their investments and convert them into cash.
Consequently, should the shareholders sell their shares after the delisting of MPIC, the following shall be the applicable taxes:
- Capital Gains Tax: The net capital gains realized from the sale will be subject to a 15% capital gains tax. If the gains are exempt from capital gains tax due to an income tax treaty, individuals must file for tax treaty relief with the BIR.
- Documentary Stamp Tax (DST): The transfer of shares outside the PSE will be subject to DST at a rate of ₱1.50 for every ₱200, or a fraction thereof, based on the par value of the shares.
These taxes are notably higher than the stock transaction tax, which is 0.6% of the gross selling price for transactions through the PSE facilities.
Furthermore, the transfer of shares outside the PSE must secure a Certificate Authorizing Registration (“CAR”) from the BIR, confirming payment of capital gains and documentary stamp taxes, or tax treaty relief, to complete the share transfer.
Given these implications, shareholders should carefully consider the impact of the Voluntary Delisting on their shares before deciding to participate in or abstain from the Tender Offer.