PSE Points to Ponder

CHP debuted in the Philippine Stock Exchange through an initial public offering at a price of 10.75 Philippine Pesos per share raising a total of 25.1 Billion Philippine Pesos. The proceeds of such fund raising were all paid to the parent company CEMEX of Mexico. Proceeds of the IPO was not even enough, CHP borrowed around 14 Billion Philippine Pesos from BDO to make additional payment to the parent CEMEX of Mexico. Despite those payments CHP still owe the parent 1 Billion Philippine Pesos. How did CHP became indebted to CEMEX? CEMEX sold the 40% of the operating companies Solid Cement and APO Cement to CHP. The acquisition of the 40% shares of the two operating companies created a goodwill of 27.9 Billion Philippine Pesos, that means the 40% shares of Solid Cement and APO Cement were acquired at around 40.1 Billion Philippine Pesos and of that purchase price only around 12.2 Billion Philippine Pesos could be attributed to tangible assets such as cement plants, equipment, machin...