}, What happened with COSCO(Cosco Capital Inc.)? - Investing in Philippines

What happened with COSCO(Cosco Capital Inc.)?

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I was reading some FB comments and some people were wondering what happen to COSCO’s stock price?

Let me give you a little background about COSCO.

Cosco which was formerly Alcorn Gold Resources Corporation was engaged in oil exploration. It was incorporated on January 1988 and on January 2000 the SEC approved its change of primary purpose to a holding company.Finally on April this year the change in name to Cosco Capital Inc. was made to make clear what this Lucio Co led company is all about. They are currently diversifying their businesses to include retail, real-estate, pharmacy, and other business.

Now with all the fuzz some people were wondering or even worse thought they were short change when the stock price slump from 15/share to 10/share. Most didn’t know that the main holder of Cosco, Lucio Co Group, listed the shares they have and made asset swap with other existing companies under the Lucio Co Group like PureGold in order to put all their businesses under the new holding company just like what Lucio Tan did by making LTG(LT Group formerly Tanduay Holdings Inc.) its holding company. Aside from the shares they already held additional shares were also listed to get funds for their expansion plans.

Below is an excerpt from BusinessWeek in regards what is to come from this transaction placement that happened with COSCO :

Bloomberg News

Philippines’ Cosco Capital Shares Slump After $400 Million Offer

By Cecilia Yap
May 31, 2013

Philippine holding company Cosco Capital Inc. (COSCO) raised about $400 million by selling shares at a 30 percent discount. Stocks slumped.

Cosco Capital and majority shareholder Lucio Co sold 1.6 billion shares at 10.50 pesos each in a transaction that widened the company’s public ownership to 30 percent, Stephen CuUnjieng, chairman at the Asia unit of Evercore Partners Inc., which helped arranged the sale, said in a briefing in Manila.

Shares of the company previously known as Alcorn Gold Resources Corp. dropped 32 percent to 10.20 pesos at the end of trading in Manila, its biggest decline since Jan. 21, 2003. The stock, which suspended trading yesterday, closed at 15 pesos on May 29. The benchmark stock index rose 1 percent today.

Three-fourths of the share sale proceeds will go directly to Cosco to expand its retail and liquor businesses, acquire non-food retail ventures and pay debt, Cosco President Leonardo Dayao said in today’s briefing. Cosco controls retailer Puregold Price Club Inc. (PGOLD) Cosco owners will get the remaining $100 million.

Businessman Lucio Co infused 51 percent of Puregold, his liquor distribution, property and oil storage businesses in Cosco in exchange for 4.99 billion Cosco shares worth 74.8 billion pesos or 15 pesos a share in December. Co’s interest in Cosco before today’s share sale was 93 percent.

Cosco plans to acquire a pharmacy chain and a network of home-improvement stores in the next six to nine months, Dayao said, declining to elaborate.

source: http://www.businessweek.com/news/2013-05-31/philippines-cosco-capital-shares-slump-after-400-million-offer

With all those planned acquisitions and expansion I bet having COSCO at 10/share is not that really bad. For those who just got it at the 15/share just wait for a while and surely you will get back your investment but us who have not gotten hold of it is the best time to catch it when it goes lower this coming days. If COSCO’s original businesses, that is oil exploration, will be revived and the planned entry to the energy sector of the Lucio Co group continues COSCO might be in the league of the big companies like SM, AC, TEL, JGS and others and it would be a good time to get a hold of it while it is at 10/share level.

Going back again to the issue I guess what most investors are arguing is that why was the price change to 10/share when it was originally at 15/share? I am not sure if it is due to the exemption rule under SRC(Securities Regulation Code) 10.1 but let see what will be the development of this issue this coming Monday.

Also for more learning on COSCO you can check out this link (click the image below)about their business and plans for the next coming months.

COSCO Company Presentation

source: http://www.pse.com.ph

About the blogger

Louis Delos Angeles is a Certified Public Accountant, blogger behind Investing in Philippines, and author of Investing in Stocks: Preparing for the future small amount at a time. Check him out in Google+ Learn more about Louis and his financial freedom advocacy here.

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13 comments for “What happened with COSCO(Cosco Capital Inc.)?

  1. June 3, 2013 at 9:07 am

    Is this the same reason why puregold is also in downward trend? Hmm, COSCO, maybe I shall read more about it once I have buying power again, HAHAHAHA

    • June 5, 2013 at 5:08 pm

      Yes it is Arlet. With Puregold now 51% owned by COSCO and with the sudden price down with COSCO, PGOLD price kinda followed its parent company. Others were complaining and thus have this ill feeling with Lucio Co companies but if you read the company presentation its actually promising. And also they will have their own mall in Urdaneta City in the Pangasinan which seems to be a northward expansion 🙂

  2. jetlimong
    August 14, 2013 at 10:51 am

    i have 150,000 shares of alcorn gold. what happens to it

    • August 18, 2013 at 6:55 am

      Good day jetlimong. Alcorn is still the same only that it has change name to Cosco and now is the holding company of the Co group. You should have received a notice from your broker or the company’s stock transfer agent about the change on name unless your were offered a buy back for the shares you are holding. The best way to clear this up is for you to contact your broker or the stock transfer agent. The company should issue you new stock certificates if you are holding one or if you are using an online stock broker your portfolio would indicate COSCO instead of APM.

      Hope this helps you jetlimong and sorry for answering your question so late.

      • jetlimong
        August 18, 2013 at 8:27 am

        Hi louis,My shares were diluted because they issued additional shares? Thank you

  3. Gilbert D. Cu
    October 2, 2013 at 5:25 pm

    Hi Louis,
    My cousin ask me to help re stock of his dad in alcorn with 20M shares, now becoming cosco. How much now is the equivalent in cosco share?

    • October 2, 2013 at 6:35 pm

      I’ll have to check it since it seems that you are buying new shares comparing the old one to the new existing one seems far but will check ok

  4. Brigget millate
    July 24, 2014 at 4:37 pm

    I have 1,000,000 shares of alcorn. What will be its current value, i do not have new certificate.

    Thank you.

    • July 27, 2014 at 11:35 pm

      You got to go to your broker in order to update your shareholding.

  5. Basty
    October 22, 2016 at 7:52 am

    I had a 500,000 APM shs….and after the change in company name (cosco) it became 5,000 shs…why is it? What happen? Pls help

    • November 4, 2016 at 4:59 pm

      Hi Basty,

      There was a change of Par value per share when Cosco took over APM. Thus the original 500,000APM shares is replaced with the equivalent no. of shares of Cosco per par value. I think APM par is at P0.01 per share while COsco is at Php1.00 per share thus the APM 500,000 no. of shares is equivalent to 5000 Cosco shares.(to compute 500,000 x0.01)

      Hope this clarifies the issue Basty.

  6. Mr M Gayac
    February 28, 2019 at 9:18 pm

    If I purchased 100,000 pesos worth of stock of alcorn in 1992 now cosco company inc how much is it if I sell it now in today’s market tnx

    • March 1, 2019 at 12:41 am

      Hi Mr. M Gayac, first of all when did you buy the stocks so that we can determine how many shares were you holding way back 1992. Then I checked the current market price of Cosco today and it is around Php 7ish. So that would be from 15 t0 10 to 7 per share. I haven’t really trailed what happen to this stock so I cant really say the reason why it went further down when we expect it to go up.

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