In the third quarter of 2018, according to Francia (2018), the beverage company Pepsi-
Cola Products Philippines Inc. (PCPPI) announced a net loss burdened by the effects of
higher taxes due to the implementation of the Tax Reform for Acceleration and Inclusion
or TRAIN law. In 2019, PepsiCo filed a disclosure statement with the local Securities and
Exchange Commission to publicly declare the shutdown of its snacks production line and
the attempting of negotiations to phase out locally produced snacks. These snack brands
include Doritos, Fritos, Cheetos, Lays, Munchies, Ruffles, Red Rock Deli, Sunchips,
Rold Gold, and Tostitos. Despite the fact that these snacks will resume to be distributed
in the Philippines, they will be entirely sourced from countries. According to Neo
(2019), one expert saw this circumstance as a more serious case of regional discomfort.
In addition to that, PepsiCo also faced a massive competition with Coca-Cola and these
challenges affected the rationalization and stabilization of PepsiCo's entire position in
Asia.
After a little while, these challenges has lead PepsiCo to delisting because its public
ownership had decreased to 2.1 percent, far below the PSE's 10 percent minimum
standard. The sale of 30.7 percent of the company's stock, or 1.13 billion shares, to Lotte
Chilsung Beverage Co. Ltd., the company's current controlling stockholder, occurred.
Pepsi-Cola Philippines' stock last traded at P1.70 per share, the investors own 94.56
percent of the company's issued and outstanding share capital. Lotte Chilsung is trying to
buy the remaining 77.86 million common shares in the company and also, it already
conducted its first round of tender offers to other shareholders. According to Valdez
(2020), this has led Pepsi-Cola Products Philippines, Inc. to obtain formal stockholder
consent to delist its equities from the Philippine Stock Exchange (PSE) and deliberately
depart the market following a thorough examination and analysis of the corporation's
alternatives. Furthermore, According to a Pepsi-Cola spokeswoman as reported by
Abadilla (2020), the company wasn’t able to meet the minimum public ownership
requirement last December 2020, due to the its then public ownership level and market
conditions.
Market movement may be minor as a result of Pepsi-Cola Philippines’ delisting.
According to Scott (2021), even though PepsiCo’s delisted from the Philippine Stock
Exchange and delisting implies the corporation is incapable to offer new securities to the
market in order to undertake new financial ventures, it has a little impact on the
Philippine economy. It is also due to the fact that the exclusive bottler of PepsiCo’s
beverage brands Pepsi, Mirinda, Mountain Dew, 7-Up, Mug, Aquafina, Tropicana, Sting,
and Gatorade will still remain in the Philippines. The delisting doesn’t entirely means that
the Pepsi-Cola Products Philippines Inc. (PCPPI) will be gone from the Philippine
economy. It basically means that this company’s delisted shares have been completely
withdrawn from the stock market with the aim of purchasing and selling which also
means that shares that have been delisted would no longer be offered on stock exchanges.
The delisting of the corporation has numerous implications for individual traders and
investors. According to the report of Valdez (2020), long-term Pepsi investors may be
dismayed by the corporation's choice because it will be difficult for them to liquidate,
especially if they opt not to engage in the expected tender offer, while some shareholders
may oppose the Pepsi-Cola’s action. Delisting can have serious effects since company
shares that aren't traded on one of the main stock exchanges are much more complicated
for investors to explore and acquire. Some individuals may lose trust because Pepsi’s
initial public offering pricing was P3.50, lower than its market valuation of P1.70, and
there's a chance that the tender offer selling price is much worse.
References:
Abadilla, D. (2020). Pepsi-Cola PH Delisting from PSE. Retrieved from
https://www.google.com/amp/s/business.inquirer.net/306998/pepsi-cola-ph-delisting-
from-pse/amp
Francia, A. (2018). Pepsi Philippines Swings to Loss. Retrieved from
https://www.bworldonline.com/pepsi-philippines-swings-to-loss/
Neo, P. (2019). PepsiCo’s Regional Discomfort : Analyst Suggests Deeper Reasoning
Behind Brand’s Philippines and Indonesia Cutbacks. Retrieved from
https://www.foodnavigator-asia.com/Article/2019/10/21/PepsiCo-s-regional-discomfort-
Analyst-suggests-deeper-reasoning-behind-brand-s-Philippines-and-Indonesia-cutbacks
Valdez, D. (2020). Business World. Pepsi Get Stockholders’ Nod to Delist from PSE.
Retrieved from https://www.bworldonline.com/pepsi-gets-stockholders-nod-to-delist-
from-pse/
