MANILA, Philippines - Philippine Long Distance Telephone Co. (PLDT) said on Thursday it will sell 150 million voting preferred shares to local investors if it is declared to be in breach of foreign ownership laws.
The country's Supreme Court issued a ruling in June 2011 that changed the calculation of foreign ownership stakes in local public utilities. The change could put PLDT in breach of the 40% foreign ownership limit.
Under the court's definition of capital, foreign investors currently own around 60% of PLDT, which has appealed the court's ruling.
Shareholders of PLDT, the country's most valuable listed firm and partly owned by Hong Kong's First Pacific Co. Ltd and Japan's NTT Communications and NTT DoCoMo, approved the creation of voting preferred shares at a special stockholders meeting on Thursday.
"Our foreign investors have unanimously endorsed the amendment to our articles of incorporation," PLDT's chairman, Manuel Pangilinan, told reporters after the meeting.
Pangilinan said the issuance of voting preferred shares, if the court upholds its definition of capital, will reduce foreign ownership of PLDT to 35%.
The company also told the shareholders that PLDT's net income in the first quarter may be "flat," but revenue should be "better" than the year-ago figure.
Company president Napoleon Nazareno cited the impact of PLDT's acquisition of Digital Telecommunications Philippines Inc, which was completed in October last year, as weighing on the company's results.
"But we're still trending within our 2012 core profit guidance," Nazareno told reporters.
PLDT expects its full-year 2012 core net profit to slip 5% to P37 billion ($863 million), after a 7% fall in 2011.
PLDT shares inched up 0.2% on Thursday in a market that gained 0.1%.