Chemical trader and distributor SBS Philippines Corp. dropped its plan for a follow-on offering and chose to hold a stock rights offering instead to fund the diversification into property-related investments.
SBS said in a disclosure to the stock exchange it would issue 350 million common shares to existing shareholders coming from the proposed increase in the authorized capital stock to P5.55 billion from P1.55 billion.
The company has not finalized the terms of the rights offering, including the entitlement ratio, offer price, record date and specific uses of the proceeds.
The offering of 350 million shares could raise up to P2.11 billion in proceeds, based on the company’s stock price of P6.03 per share.
“The rights issue is intended to provide additional core capital to support the growth and strategic initiatives of the company which will include, among others, its business diversification plans to engage in property related investments and businesses,” SBS said.
SBS said its board of directors approved to recommend to the shareholders the stock rights offering of unissued common shares to be offered first to all existing shareholders.
“Anesy Holdings Corp., the company’s major shareholder, has indicated its support for the rights issue and will subscribe to any remaining stock rights shares that will be unsubscribed after the mandatory second round of the stock rights offer,” SBS said.
The rights offering will be conducted within 12 months from the shareholders approval. It will also be subject to the approval of the Securities and Exchange Commission and Philippine Stock Exchange.