DMCI Holdings Inc. of the Consunji Group said it obtained shareholders’ approval to issue P10 billion worth of preferred shares to affiliate Dacon Corp. to help fund the acquisition of cement maker Cemex Holdings Philippines Inc. (CHP)
DMCI shareholders approved the issuance of 10 million Class B preferred shares at P1,000 apiece during the special stockholders meeting.
The preferred shares will have a fixed dividend rate of 4 percent per annum to be paid out on a quarterly basis.
DMCI chairman Isidro Consunji assured shareholders during the meeting that the preferred shares issuance would not affect the company’s dividend policy.
“The management remains committed to the dividend policy of paying out at least 25 percent of previous year core net income,” Consunji said.
Consunji said the primarily reason for the issuance is to enable the company to raise P10 billion for the purchase of a 56.75-percent stake in Cemex Asian Southeast Corp. (CASEC), which in turn holds 89.86-percent interest in CHP.
“It does not intend to dilute the voting rights of the common shareholders and will strengthen the balance sheet and it is treated as equity capital. Furthermore, the convertibility option provides the flexibility in managing the capital structure and optimizes the cost of capital,” Consunji said.
DMCI also obtained clearance from the Philippine Competition Commission to proceed with the acquisition.
Consunji said the parties now intend to execute the preferred shares offering and conduct the mandatory tender offer within the next couple of months.
The tender offer aims to acquire the remaining 10.14 percent of CHP owned by minority investors. It intends to acquire up to 1.37 billion publicly owned-CHP common shares at P1.42 apiece.
DMCI said the addition of cement manufacturing would be a good fit to the group’s business portfolio, which now includes real estate development, coal mining, power generation, construction and nickel mining.
DMCI said it would keep CHP listed in the local bourse.
