CONSUMER technology firm Xurpas Inc. raised P1.2 billion in fresh capital from a “top-up” equity deal, replenishing its war chest for future expansion while widening public ownership.
Armed with fresh capital, Xurpas is “looking at expanding to other markets,” company president Nico Jose Nolledo said, when asked about the rationale for this equity deal.
Nolledo said Xurpas was hoping to strengthen existing investments and looking at other growth opportunities for mobile products.
The founding shareholders of Xurpas, including Nolledo, sold around P2.5 billion worth of shares to new investors but ploughed back nearly half of the proceeds in the “top-up” equity deal disclosed on Tuesday.
With this transaction, trading liquidity is enhanced as the deal will widen the public float to 28 percent from 20 percent.
Based on the disclosure, Nolledo along with Xurpas treasurer Raymond Gerard Racaza and chief technology officer Fernando Jude Garcia agreed to sell a combined 155.4 million of their existing shares to the market at P16 per share. However, they will also subscribe to 77.7 million new common shares to be issued by Xurpas, equivalent to 4.32 percent of the enlarged capital stock, at the same price per share of P16 per share.
Each of these three shareholders will dilute interest in Xurpas to 23.1 percent from 25.7 percent.
“The overnight top-up placement allows the corporation to raise capital in a most expeditious and efficient manner to fund its potential future strategic acquisitions,” Xurpas told the Philippine Stock Exchange on Tuesday.
Trading on Xurpas shares was halted at 9 am on Tuesday to allow investors to digest the material impact of this new equity deal.
Xurpas said the actual allocation of the net proceeds would depend on various factors, including the results of the corporation’s operations, the cost and timeline of the proposed projects and acquisitions, the market conditions, the availability of suitable opportunities, the timing of regulatory approvals and other factors. “To the extent the corporation does not use the proceeds for the purpose described above, the corporation intends to use such proceeds for general corporate purposes,” it said.
The deal is expected to achieve financial closing on April 29.
Xurpas intends to secure the approval of the PSE for the listing of the new shares sold to investors.