NOW Telecom, an affiliate of publicly listed telecommunications, media, and technology firm Now Corp., has just appointed Unicapital Inc. as financial advisor to assist in preparing for possible fund-raising activities for its 5G network rollout. Unicapital will act as exclusive financial advisor for a planned corporate restructuring as well as exclusive issue manager and financial advisor for a planned listing by way of introduction in a stock exchange.
Together with its advisor, NOW Telecom is also assessing the suitability of listing its shares on the local bourse or within the region, given its medium-term business plans.
“We are moving forward with the corporate restructuring of NOW Telecom to take it to the next level. NOW Corp and NOW Telecom were the first to introduce 5G Broadband speed of up to 2Gbps direct to our existing enterprise clients. Our next move is to extend said service to the residential and consumer markets,” according to Mel V. Velarde, founder and chief executive officer of the NOW Group of Companies.
Earlier, NOW Telecom revealed that it plans to spend $713 million for its five-year 5G fixed wireless access business plan. The company aims to deploy the 5G FWA network in the National Capital Region and offer a broadband plan of up to 10 gigabit per second service.
Of the $713 million, around $152 million will be used in the first three years, mostly to acquire new 5G radio equipment.
In a recent disclosure to the Philippine Stock Exchange, parent NOW Corp. announced its bid to expand its 5G broadband enterprise services, as it intends to increases its stake in its telecom affiliate, NOW Telecom.
NOW Telecom is hoping to build on its current stronghold, particularly business enterprises, highly dense residential areas, high-end residential homes, and high-rise buildings. Company officials emphasized that the telecom firm is well-positioned in the enterprise and high-end residential market in the country via 5G FWA and that with fairly limited competition in this space, there is a strong opportunity to gain a profitable market share.
It will be recalled that last year, NOW Telecom signed an MOU with SK Telecom, South Korea’s largest telecom provider, to help design the company’s 5G network.
The company also inked a memorandum of understanding with Singapore-based HyalRoute Group, through local subsidiary Philippine Fiber Optic Cable Network, Ltd. (PFOCN), in connection with shared fiber infrastructure assets nationwide.
Velarde earlier noted that in all these years, the company has succeeded on the basis of a clear and highly differentiated competitive strategy by focusing on addressable and profitable target customers, and by building a wireless broadband network with cutting-edge technologies.
At the Special Meeting held on 24 August 2020, the Board of Directors of NOW Corporation approved, confirmed, and ratified the offer of an existing shareholder, Velarde, Inc., to subscribe to a) 102,000,000 common shares of NOW, equivalent to a 5.75% equity stake in NOW post subscription, at P2.25/share per common share or an aggregate amount of P229,500,000.00; and b) 60,000,000 Redeemable Convertible Cumulative Non-Participating Non-Voting Peso-denominated Preferred Shares of NOW, with one (1) free Detachable Warrant for every preferred share subscribed to (1:1 ratio), at PhP1.00 per preferred share or an aggregate amount of P60,000,000.00. The Subscription Price on the common shares represents (a) approximately [1.81]% premium to the closing price of NOW shares as at [20 August 2020] and (b) approximately [4.68]% premium over the volume weighted average of the closing prices of NOW shares as quoted on the PSE for a period of 30 trading days prior to the Special Board Meeting. The preferred shares subject of the placement are presently not traded on any exchange and carry a par value of P1.00 per share.
The Preferred Shares may be converted to common shares of the Company at a conversion price of P2.25 per share, at any time from the 1st year anniversary from the issue date of the preferred shares until the 5th year anniversary from issue date of the preferred shares. The dividends payable to the holder of the Preferred Shares will be at the fixed rate of one percent (1.00% p.a) per annum, calculated in respect of the placement price of the Preferred Shares. The 60,000,000 warrants to be issued as part of the preferred share subscription are exercisable after the 2nd year anniversary from issue date until the 5th year anniversary, at a strike price of P2.25 per common share.
The proceeds from the placement are intended for the Company’s additional equity infusion in its telecom affiliate, NOW Telecom, and for other general corporate purpose. The details of the use of proceeds shall be disclosed at the appropriate time when the terms and conditions become final.
