Shareholders of ISM Communications Corp. approved a share swap with Udenna Corp. of businessman Dennis Uy, paving the way for the backdoor listing of Uy’s holding company.
Udenna shareholders approved during a special stockholders’ meeting Thursday an increase in the company’s authorized capital stock to P75 billion from P2.8 billion.
ISM will will issue 24.05 billion shares to shareholders of Udenna at an issue price of P3 apiece to support the capital increase.
In exchange, ISM will obtain 2 billion Udenna shares, representing 100 percent of the outstanding capital stock of Udenna. Udenna will own an 89.57-percent stake in ISM after the share swap deal.
Shareholders of ISM also approved the change in the corporate name of the company to Udenna Holdings Corp.
Udenna is one the fastest growing holding companies in the country. It has ventured into key sectors, including petroleum and ancillary services through direct and indirect shareholdings in Phoenix Petroleum Philippines Inc. and shipping and logistics through majority shareholdings in Chelsea Logistics Holdings Corp..
It also went into hospitality, tourism and gaming through Philippine H2O Ventures Corp., property and land development through Udenna Development Corp., educational institution and facilities via Enderun Colleges Inc. and infrastructure projects through Udenna Infrastructure Corp.
Meanwhile, ISM chairman Eric Recto said in an interview after the annual stockholders’ meeting the group would conduct a fund raising activity to widen the public float to between 15 percent an 20 percent.
Recto said ISM would secure approval of the regulator to conduct the fund raising activity.
ISM will be the second backdoor listing deal involving Uy’s companies. Uy last year also acquired Philippine H20 Ventures Inc. from a group led by Jolliville Holding Corp., which has been transformed as the listed casino company of Uy and renamed PH Resorts Holdings Corp.
Udenna Corp. posted a net income of P4.1 billion in 2017 against P779.6 million in 2016, while revenues grew to P50.9 billion from P31.39 billion in 2016.
Share price of ISM on Thursday rose 7.3 percent to P6.75. ISM was originally incorporated under the name Itogon-Suyoc Mines Inc. to engage in the mining business.