SEC approves P1-billion preferred shares offering of Now Corp.

THE Securities and Exchange Commission (SEC) on Wednesday approved the P1-billion preferred shares offering of Now Corp., a company that has voiced its intentions of becoming the country’s third telecommunications player.

In its registration statement, Now, an information-technology company, said it hopes to sell a total of 5 million convertible preferred shares, with an over-allotment of another 5 million shares at a price of P100 apiece. This preferred shares offering can be converted into a total of 50 million common shares at a conversion price of P20 per share or a ratio of one preferred share to five common shares. Each share, meanwhile, contains a detachable warrant one share to two warrants.

Net proceeds of the offering will amount to about P955.46 million. “The company intends to use the majority of the net proceeds from the offer to partly fund the capital expenditure of the expansion of the fiber-in-the-air, fiber optic network and for general corporate purposes,” the company said in its statement submitted to the SEC.

The company declared its intent to become part of the bidder for the third telecommunications company in the country since it is a duly enfranchised telecom firm.


The company “is currently considering the possibility of entering into a partnership with the company and other strategic domestic and foreign partners in order to participate in the aforementioned bid for the third telco slot.”

It said it would undergo an equity restructuring by applying the additional paid-in capital created by the offer, subject to the approval of the SEC. The said restructuring hopes to wipe out the capital deficit that may be currently impairing the ability of the company to declare and pay dividends, it said.

“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 management the flexibility to invest the surplus cash back to grow the business,” it said. Offer period will start on June 28 through July 4, while the shares will be listed on July 12.

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