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MANILA—The holding company firm NextStage Inc. plans to merge with coconut-based vodka producer VuQo Inc. in a backdoor listing exercise meant to provide the latter with a platform to raise capital.
In a disclosure to the Philippine Stock Exchange, NextStage said its merger with VuQo was targeted for implementation this first quarter of 2014. The holding firm henceforth plans to change its corporate name to Jackstones Inc.
The merger is seen to result in the issuance of NextStage shares to the shareholders of VuQo tentatively equivalent to about 1.5 times the current outstanding listed shares of NextStage, which will be the surviving entity.
VuQo was described in the disclosure as an “entrepreneurial” company that has developed and proven the concept of producing coconut-based vodka in the Philippines for world market consumption.
“Having been able to go beyond its early start-up stages, VuQo has caught the attention of a corporate entity with a world-famous brand established in the entertainment industry for over 60 years. This brand owning entity, which is based in the U.S.A., had plans to license a spirits and liquor company and saw it fit to grant the license to VuQo to develop and build its exclusive spirits brand,” the disclosure added.
On top of this licensing agreement, the global brand-owning entity has signed an option to invest $1 million to acquire a 4-percent stake in VuQo. This option puts the effective valuation of 100 percent of VuQo at $25 million.
The holding firm added that this merger between NextStage and VuQo would provide the platform to raise capital to achieve the objectives of the business: “to create a high-potential export product from the Philippines for the world market, supported and propelled by a corporate entity with a globally renowned brand recognized in major markets in North America, Europe and Asia.”
Upon implementation of the merger, NextStage said, the projected profits from the operations of VuQo would boost the overall value of NextStage.
At this stage, VuQo’s main asset is its licensing agreement with the well-known brand owning entity and its mandate to produce, market and distribute the entity’s spirits line of vodka, tequila and gin. Its agreement with the foreign entity is multi-year with renewal option.
NextStage was originally incorporated in 1964 as Pacific Cement Co., Inc. to engage in the manufacture and trading of cement and related products. In 2000, the Securities and Exchange Commission approved the change in primary purpose to that of a holding company and changed its corporate name to PACEMCO Holdings, Inc. That same year, PACEMCO acquired 100 percent of the capital stock of NextStage, leading to a merger in 2001. Last year, NextStage was revitalized into a holding company.