Roxas and Company Inc. announced the signing of a P800-million equity placement commitment with LDA Capital LLC, a US and European based global investment group.
The equity placement commitment is part of RCI’s fund-raising activities aimed at strengthening its subsidiaries engaged in agri-business, real estate development, hotel operations and management. RCI will use the LDA proceeds for additional working capital and to support the reduction of bank debts.
Under the equity placement commitment, RCI has the right, but not the obligation, to sell shares to LDA subject to the conditions of the put option agreement. RCI will control the timing and maximum amount of the POA and may sell up to P800 Million worth of RCI treasury shares during the 36 months from signing of the agreement. All transactions pursuant to the POA will be subject to required regulatory and Board approvals.
In addition to the equity placement commitment under the POA, LDA will be given a call option to purchase up to 99 million common shares of RCI at an exercise price of P2.38 per share, exercisable any time during the term of the agreement. The equity placement commitment provides a natural hedge against the uncertainty and volatility of a public markets offer, and as such, demonstrates the “staying power” of RCI and its subsidiaries during the pandemic-induced downturn.