NextStage aborts merger plan

Holding firm NextStage Inc. has aborted plans to merge with coconut-based vodka producer VuQo Inc. given restrictions on private placements among companies joining the bourse through backdoor listing.

In a disclosure to the Philippine Stock Exchange Friday, NextStage said recent developments have made the planned merger “less feasible,” citing the requirement of the Philippine Stock Exchange for a conduct of a follow-on offering to the public prior to the acceptance of any private placements.

“The lengthy period that would result from undertaking a follow-on offering would fail to satisfy the urgent key needs of VuQO Inc. of immediate funding to start operations,” the disclosure said.

VuQo was described by NextStage as an entrepreneurial company that has developed and proven the concept of producing coconut-based vodka in the Philippines for world market consumption. It was earlier disclosed that VuQo had caught the attention of a corporate entity with a world-famous brand established in the entertainment industry for more than 60 years.

The US-based brand-owning entity granted the license to VuQo to develop and build its exclusive spirits brand. 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, placing the effective valuation of 100 percent of the liquor-maker at $25 million.

The disclosure Friday said VuQo had received an offer of direct equity investment provided that it would remain private and not listed. During NextStage’s stockholders meeting also held on Friday, NextStage’s chair said the corporation would not block any funding possibility to get VuQo operations going even as shareholders agreed to withdraw from the merger process. “However, shareholders who may wish to remain part of VuQo can enter into a swap agreement with VuQo shareholders in order to be part of both VuQo and the corporation on an independent basis,” the disclosure said.