MANILA, Philippines — Now Corp. expects to generate higher cash inflows with a plan to raise its stake in telco affiliate Now Telecom Co. Inc.
“The company’s increase in equity stake in Now Telecom will have an impact on the business operations of the company due to the increased share in the growth prospects of Now Telecom,” the publicly-listed firm said.
Now intends to increase its equity in Now Telecom from 19 percent to 24.23 percent.
“The additional stake in Now Telecom will generate higher cash inflows from revenues and augment the company’s market position in the TMT (telecommunications, media, and technology) space given Now Telecom’s extension of legislative franchise and provisional authority to operate as a cellular mobile telecommunications company,” the company said.
Now will subscribe to one million primary common shares of Now Telecom using the company’s existing advances amounting to P130.5 million and additional cash deposits for future subscription of P469.5 million for a total subscription consideration of P600 million.
Now said the company’s subscription of one million common shares in Now Telecom would support the corporate restructuring activities and future prospects of the telco license holder.
NOW Telecom will increase its authorized capital stock and issue shares subscribed by the Now to accommodate the subscription.
The parties have yet to execute a subscription agreement to date, but the completion of the transaction between the parties expected by September, according to Now.
Now is a licensed value-added service provider of TMT products.
The publicly listed firm, part of the NOW group of Mel Velarde, has access to broadband internet business called Fiber Air, which provides broadband internet connection via fixed wireless mainly to the enterprise segment.
Part of the customer segments of NOW includes banking, logistics, education, hospitality and even government.
Now Telecom, on the other hand, is looking to position itself as the country’s fourth major telecommunications player.
It earlier revealed plans to spend $713 million for its five-year 5G fixed wireless access business plan.