Lucio Tan-owned Tanduay Holdings Inc. will sell more shares to the public in a bid to raise capital for expansion and comply with the new minimum free float requirement of the Philippine Stock Exchange.
In a disclosure to the bourse Thursday, Tanduay officials said the deal would involve the sale by Tangent Holdings Inc.—the firm’s controlling shareholder—of 398 million shares it holds to the public at a price that has yet to be determined.
The sale is expected to bring the company’s free float level to more than the 10-percent floor imposed by the government on a listed company to be exempted from capital gains tax.
At present, Tanduay’s free float stands at less than 3 percent.
“The capital raising exercise is intended to fund the company’s expansion of capacity, increase in operational efficiency and rationalization of operations. It also offers the investing public the opportunity to participate in the company’s growth,” corporate secretary Cecilia Pesayco told the exchange.
At the same time, Tangent Holdings intends to buy from the company’s unissued capital stock the same number of shares it would sell and at the same price it would sell them for.
Tanduay also said its board had approved the appointment of PNB Capital and Investment Corp. as the financial adviser and issue manager of the deal in its last board meeting.
As a result of the announcement, the PSE imposed a one-hour halt on the trading of Tanduay shares Thursday to allow investors to digest the implications of the disclosure.
In the same disclosure, Pesayco told the bourse that Tanduay’s consolidated net income for the first nine months ending Sept. 30, 2011, amounted to P855 million, representing a 60-percent increase from year-ago level.
“The nine-month net income also surpassed the full-year net income of P654 million in 2010. The company is well on track to meet its targeted P1 billion net income for 2011,” she added.
At the PSE Thursday, Tanduay’s illiquid shares ended at P4.40 per share, up slightly from its previous level of P4.35 executed on Oct. 19, 2011.