DFNN board OKs fund raising
Technology solutions provider DFNN Inc. has unveiled plans to raise as much as P250 million in fresh funds for expansion from an offering of perpetual preferred shares to selected institutional investors.
DFNN told the Philippine Stock Exchange on Thursday that its board of directors had approved the issuance of preferred shares to qualified institutional buyers. Proceeds will be used for capital expenditures and working capital, the disclosure said.
The company plans to issue 100 million of these preferred shares, equivalent to 41.44 percent of outstanding shares, at P2.50 per share. The shares will be taken from the unissued preferred shares from DFNN’s authorized capital.
Based on the disclosure, DFNN will have the option, but not the obligation, to redeem the perpetual preferred shares in whole or in part on the fifth year anniversary from issue date or on any dividend payment date thereafter at the redemption price equal to the issue price plus cumulative and unpaid cash dividend, if any, for all dividend periods up to the date of actual redemption.
The offering will start as soon as DFNN gets approval from the Securities and Exchange Commission.
The preferred shares will be offered as a private placement and will be available to not more than 19 qualified buyers.
It was earlier reported that DFNN is embarking on a capital restructuring program to wipe out about P643 million in deficit and allow the company to start declaring dividends. DFNN has agreed to issue 8.3 million common shares to various existing shareholders by virtue of conversion of loans into equity. The board also plans to list on the PSE some 91.28 million common shares issued out of DFNN’s authorized capital stock as well as the 8.3 million new shares to be issued as part of the loan to equity conversion.
The plan is to eliminate the company’s deficit in its retained earnings account by offsetting the deficit as of December 31, 2014 against additional paid-in capital.
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