Listed Prime Media Holdings Inc. is being transformed into a mass media company through a backdoor listing.
Prime Media said in a disclosure to the stock exchange Thursday Philippine Collective Media Corp., which is engaged in radio and television broadcasting, would acquire a 70-percent interest in the company.
Under the memorandum of agreement signed by both parties, PCMC will subscribe to 1.679 billion shares in Prime Media from the proposed increase in the latter’s authorized capital stock.
“The transaction will result in folding-in of PCMC into the company, thereby making PCMC a subsidiary of the company. With the national franchise of PCMC, the company can engage in an active business of mass media and further leverage its franchise and network for use by existing content providers in need of broadcasting rights,” Prime Media said.
Prime Media said the planned deal would also transform the company into a viable and operational business entity and address its capital deficiency, negative equity and non-operation.
Following the disclosure, the Philippine Stock Exchange suspended the trading of Prime Media shares as the transaction is covered by the exchange’s rules on backdoor listing.
“After a review of the company’s disclosures, the exchange deems that the foregoing transaction is covered by the exchange’s rules on backdoor listing. Said determination is anchored on the transaction involving a change in the controlling shareholder of Prime Media and the new business to be folded into the company upon completion of the transaction,” the PSE said.
It said the trading of Prime Media shares would remain suspended, pending the submission of comprehensive corporate disclosure regarding the transaction.
Prime Media shares were last traded on Wednesday at P2.56 per share.