THE Securities and Exchange Commission (SEC) on Wednesday gave the go-signal for Now Corp.’s proposal to issue up to P1 billion worth of preferred shares.
In an e-mail to reporters, the commission said it has approved en banc Now Corp.’s registration statement where it will offer five million preferred A shares at P100 apiece, with an oversubscription option of up to five million preferred A shares at P100 each.
The primary offer consists of five million redeemable, convertible, cumulative, non-participating, non-voting peso-denominated preferred shares. These can be converted into 25 million common shares at P20 each, with one preferred A share equivalent to five common shares.
Each preferred share also includes two detachable subscription warrants to be issued free of charge, for a total of 10 million detachable subscription warrants.
The same terms apply to the oversubscription option of up to five million preferred A shares.
The issuance is set to be offered from June 28 to July 4, with listing at the stock exchange targeted on July 12. The company has engaged Unicapital, Inc. as the issues manager, bookrunner, and underwriter.
The company will still need clearance from the Philippine Stock Exchange to proceed with the offer.
Now Corp., which is widely expected to make a bid to become the third telecommunications player in the country, looks to net P471.05 million from the primary offer, and up to P955.46 million including the oversubscription option.
Proceeds of the offer will be used to partially finance the company’s expansion of Fiber-in-the-Air, its fiber optic network, and for general corporate purposes.
The offer will result to an additional paid-in capital of up to P495 million and P990 million considering the primary offer and over-allotment option, respectively, which the company intends to use to wipe out its capital deficit. It noted that this is why it has been unable to declare and pay dividends.
“Once the company obtains the necessary approvals and implements the equity restructuring plan, the company can resume paying dividends from future cash flows as they no longer have to use the same to eliminate retained earnings debit balances. This will also allow the management the flexibility to invest the surplus cash back to grow the business,” the company said.
Incorporated in 1996, Now Corp.’s core business is in providing telecommunications, media, and information technology products and services under three business segments. These are software licenses and services, IT manpower and resource augmentation, and broadband and wireless cable TV services.
Recently, Now Corp. has expressed its interest to become the third telco player in the country, following the government’s announcement to bid out a franchise for a third telco company that will break the duopoly of PLDT, Inc. and Globe Telecom, Inc.
The company realized a 248% jump in net income to P3.53 million during the first quarter of 2018, lifted by gross revenues that went up 3% to P33.85 million for the period.
Shares in Now Corp. surged 8.24% or 75 centavos to P9.85 apiece at the stock exchange on Wednesday. — Arra B. Francia