THE board of directors of grocery-chain operator Puregold Price Club Inc. has approved the company’s increase in authorized capital stock to P5 billion from the previous P3 billion, a measure aimed at raising more capital in the future.
It said the company would amend its articles of incorporation, which would need the shareholders’ approval, to reflect the changes.
“After the recent top-up placement of the company, there are only around 100 million shares left in the unissued portion in its capital stock. The increase in the authorized capital stock will prepare the company in case there is a need or opportunity to raise fund in the future,” it said.
“The company is just getting ready, if ever there are good opportunities—for example, acquisitions—in the future. We are very near our maximum for authorized capital. So far, there are no plans for equity capital raising,” said John Marson Hao, the company’s investor relations officer.
Lucio Co, the company’s chairman, last month, sold 104 million common shares in a top-up placement deal at a P45 apiece.
The price is equivalent to a 6.8-percent discount from its last close of P48.30 on January 16.
The company said it completed the placement upon the approval by its board of directors.
The said shares represent about 3.8 percent of the company’s total issued and outstanding stock.
“The deal was done via an overnight book built offering with Mr. Lucio L. Co as the sole selling shareholder,” it said earlier.
The shares sold by Co represent part of his indirect holdings at the company lodged with Deutsche Regis Partners Inc.
Co signed a subscription agreement to subscribe to the same number of Puregold shares and price per share.
The company said it would use the proceeds for general corporate purposes, capital expenditure and potential acquisitions.
Puregold reported a consolidated net income of P4.62 billion for the three quarters of 2018, an 18-percent increase from last year’s P3.9 billion.
Its stores registered stronger than expected same store sales growth (SSSG) of 5.8 percent during the period, while S and R registered a SSSG of 8.8 percent.
“We are optimistic we will be able to sustain our SSSG in the last quarter of 2018 to be driven by higher consumer spending fueled by higher levels of take-home pay as a result of the tax reform law,” the company said.