The Securities and Exchange Commission (SEC) has approved a plan by the Alcantara group’s holding firm Alsons Consolidated Resources Inc. to raise as much as P2.5 billion from an offering of commercial papers over a three-year period.
The first tranche of the offering is pegged at P500 million, based on a document from the SEC.
Alsons plans to list the commercial papers on the local fixed-income trading platform Philippine Dealing & Exchange Corp.
A commercial paper is an unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivables, inventories as well as meeting short-term liabilities.
About 20.02 percent of Alsons’ shares are currently held and traded by the public.
Alsons has about P462.31 million worth of maturing short-term obligations owed mostly to the Metrobank group.
Short-term loans were availed to partially finance projects under development.
“Once these projects under development are implemented, these project costs will be consolidated and funded from longer term funding,” a prospectus from Alsons read.
Established in 1974, Alsons is in the business of exploration of oil, petroleum and other mineral products. Its interests are grouped into various categories: energy and power, property development and other investments.
The holding firm is currently valued by the stock market at around P9.1 billion.
The offering of up to P2.5 billion worth of commercial papers was filed by Alsons under the SEC’s shelf registration window.
This allows issuers to register and sell under the same prospectus and other regulatory filing requirements a certain volume of securities, but which it does not intend to use up right away.
In the event that an oversubscription option is not fully exercised, the unused portion will be made part of the remaining bonds in the shelf to be used within a three-year period.