A significant shift is underway as BDO Unibank, one of the Philippines’ largest financial institutions, has agreed to sell its controlling interest in Dominion Holdings, Inc. for a substantial P2.54 billion.
The deal, finalized on January 19th with Monte Sur Equity Holdings, Inc., involves the transfer of 1,513,732,718 shares – a commanding 70% stake – at a price of P1.68 per share. This move signals a strategic restructuring within the BDO Group.
Following this transaction, Dominion Holdings will operate independently, no longer functioning as a direct subsidiary of BDO. The bank explained the sale aligns with its ongoing efforts to streamline operations after Dominion Holdings transitioned into a pure investment holding company.
To allow for thorough consideration, Dominion Holdings requested a temporary suspension of trading, which will be lifted on January 21st. This pause provides investors time to assess the implications of the ownership change.
The sale isn’t immediate; it requires approval from regulatory bodies and the completion of specific conditions, including a mandatory tender offer from Monte Sur Equity Holdings. This ensures fairness and transparency for all shareholders.
Formerly known as BDO Leasing and Finance, Inc., Dominion Holdings currently manages a diverse portfolio of assets, including real estate, securities, and shares in other companies, actively engaging in related investment activities.
The company underwent a significant transformation in July 2022, officially changing its name and refocusing its purpose to that of a dedicated investment holding entity. This repositioning paved the way for the current strategic move by BDO.
Recent financial reports reveal Dominion Holdings experienced a slight dip in net income during the third quarter of 2023, reporting P34.81 million compared to P36.53 million the previous year. Nine-month profits also decreased to P106.43 million from P171.01 million.
Despite this, BDO itself demonstrates strong financial performance, with attributable net income rising 6.1% year-on-year to P22.47 billion in the third quarter, and nine-month earnings increasing 4.07% to P63.09 billion. However, BDO’s share price saw a modest decline on the day of the announcement.
In a separate development, BDO successfully concluded its offering of sustainability bonds ahead of schedule, driven by exceptionally high demand from both individual and institutional investors. The initial offering period was cut short due to this robust interest.
While the final issue size remains undisclosed, these bonds, with a coupon rate of 5.7125% per annum, are slated for issuance, settlement, and listing on January 26th. They represent BDO’s fifth offering of ASEAN Sustainability Bonds.
The funds raised will be strategically allocated to finance eligible sustainable projects, bolster lending activities, and diversify the bank’s funding sources, reinforcing BDO’s commitment to responsible financial practices.
Standard Chartered Bank served as the sole arranger for the bond offering, alongside BDO itself as a selling agent. BDO Capital and Investment Corp. provided financial advisory services for this successful transaction.
This latest sustainability bond issuance adds to BDO’s growing portfolio, bringing the total raised through such bonds since January 2022 to an impressive P286.7 billion, demonstrating a clear dedication to sustainable finance.
