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From IPO to ‘backdoor listing’ in 6 years: PSE won’t lift Xurpas suspension, wants more details on Ragaza-Nolledo-Garcia’s 10-centavo per share sale to obscure VC firm

The Philippine Stock Exchange has rejected IT bust Xurpas’ bid to resume trading of its shares due to its lack of transparency in the planned exit sale of its founders – Nico Jose Nolledo, Raymond Racaza, and Fernando Jude Garcia – to an obscure American venture capital firm.

The PSE said the proposed sale of 1.707 billion shares or 48 percent of Xurpas to Wavemaker Partners group, led by Frederick Manlunas, was not an ordinary stock sale as Nolledi-Racaza-Garcia presented but a backdoor listing.

READ: From IPO bubble to IT bust: Xurpas in full meltdown as Ragaza-Nolledo-Garcia’s losses swell to P3.5B

The Xurpas founders are selling their shares to the Wavemaker Group at 10 centavos each or way, way below the company’s much-ballyhooed initial public offering price of P3.97 per share six years ago. Xurpas will then use the P170 million raised from the deal to buy the Wavemaker group.

“After a careful review of the company’s submissions and disclosures, the exchange deems that the foregoing transactions are covered by the exchange’s rules on backdoor listing. Said determination is anchored on the series of transactions effectively resulting to an acquisition by a listed company (i.e., Xurpas) of an unlisted company (i.e.,Wavemaker Group and its related entities) and the purchase by the Wavemaker Partners of Xurpas shares resulting to a substantial change in Xurpas’ voting structure, among others,” the PSE said.

This means Xurpas “has to comply with certain regulatory and legal requirements for the benefit of the investing public and all stakeholders before the Exchange allows the resumption of the trading of the company’s shares in the market,” the PSE said.

Until Xurpas provides more details, PSE said the suspension in trading of the company’s shares shall remain in effect.

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