The Securities and Exchange Commission has approved a plan of Now Corp., which aspires to be the country’s third telecom provider, to raise as much as P1 billion through an offering of preferred shares.
Based on an SEC document, Now is authorized to offer up to 10 million redeemable, convertible and nonvoting preferred shares at P100 a share.
In its prospectus, Now said it intended to use “a majority of the net proceeds from the offer partly to fund the capital expenditure for the expansion of the fiber-in-air, fiber optic network.”
Now also plans to undergo an equity restructuring by applying the additional paid-in capital created by the offer to wipe out the capital deficit that is impairing its ability to declare and pay dividends.
The base offer is five million preferred shares but Now was given the option to upsize the offering by another five million preferred shares.
The 10 million preferred shares will be covered by 50 million in underlying common shares to be issued upon conversion of preferred shares at P20 a share. Five common shares will be issued for every one preferred share.
The offering of up to 10 million preferred shares comes with 10 million detachable warrants to be issued free of charge at a ratio of one preferred share to two detachable subscription warrants.
Including the oversubscription portion, there will be underlying 20 million common shares at a ratio of one detachable warrant to one common share.
Unicapital Inc. is the issue manager, bookrunner and underwriter.
Now intends to hold the offering on June 28 to July 4 and list the preferred shares on July 12.
Led by businessman Mel Velarde, Now is an IT company with three business segments: software licensing and servicing, IT manpower and resource augmentation, and broadband and wireless cable TV services.