IF ONE IS to believe the financial statement submitted by the EEI to the Securities and Exchange Commission (SEC), the corporation which was once regarded as one of the country’s most formidable has started to show indicators of an imminent “sign off.”
EEi, a Yuchengco-controlled construction company, is on a skid — incurring losses and drowning in debt. It is for this very reason that EEI in mid-2023 sold 20 percent of their common shares amounting to P1.2 billion.
The buyer — RYM Business Management, a company owned and controlled by former House Speaker Martin Romualdez. Hence, the deal was signed.
For one, having Romualdez as a shareholder meant a lot for EEI and other struggling companies. Afterall, the power he wields could bring EEI back on track by securing chunky government contracts.
But in early 2024, Romualdez suddenly had a “change of heart.” The former House Speaker told EEI that he wanted a “buy-out.” There’s nothing wrong with the buy-out though except for the ill motive.
But with a company that has yet to recover, there’s no way they could afford the amount Romualdez wanted — P3.75 billion for common shares he bought for P1.2 billion.
But for some reasons, EEI was able to pay the amount that the presidential cousin demanded. Oh yes, Romualdez got exactly what he wanted — P2.55 billion profit in just eight months.
However, the supposed “buy-out,” which was done in a haste, raised the eyebrows of stock market analysts. According to seasoned PSE analysts, “buy-outs” were used to streamline control of a company that had too many stakeholders.
It’s one potential financial solution to the “too many cooks in the kitchen” problem, and one that shareholders are probably fairly open to as it maintains the status quo.
The overall issue is that EEI has been trash since the RYM stake sale was announced. Back then, the stock pumped 118% in just a few weeks on that news, but never really seemed to get any traction.
Aside from a rally in early 2024, EEI’s market value has steadily dropped back down to the pre-RYM level.
Given these premises, the Securities and Exchange Commission, the agency in charge with the registration and supervision of corporations and securities, as well as capital market institutions and participants, should seriously consider complying with its mandate.
Perhaps an honest-to-goodness investigation would be a good start. How would a company which has declared losses and billions of debt, manage to pay off Romualdez.
And to think they agreed to pay Romualdez P3.75 billion for something that they sold to him at P1.2 billion.
I smell something fishy, especially involving Romualdez.