FEU shoots for expansion with capital buildup
Private school operator Far Eastern University plans to jack up its authorized capital to P5 billion to fund an expansion program.
FEU’s board of trustees approved an amendment in its articles of incorporation to increase the authorized capital stock of the corporation from P2 billion to P5 billion, divided into 50 million shares from the current 20 million shares of common stock.
The shares have a par value of P100 per share. But based on the current market price of P900 per share, the proposed 30-million capital hike is worth around P27 billion.
In its disclosure, FEU said this capital hike would allow the company to “declare a 46-percent stock dividend in order to increase its capital base.”
The capital buildup was also seen to “allow the company to increase its capital base necessary for its expansion.”
This proposed amendment to the articles of incorporation will be submitted for approval at FEU’s annual stockholders this Oct. 19.
The board has also approved the declaration of a stock dividend of 46 percent on the outstanding capital stock of the corporation, or a total stock dividend of up to 7.58 million shares of common stock, eliminating any fractional shares, payable out of the unrestricted retained earnings of FEU as of end-Mar this year.
In its 2018 annual report, FEU said that as an academic institution, it was “fully aware of the importance of education in nation building and to its students who benefit from quality instruction, research and community extension.”
“The group is committed to continuously uplift academic standards through updating of its curricula, developing the faculty, improving the services to its students and providing the best educational facilities,” it said.
Apart from its main campus in Manila, the group includes FEU Institute of Technology, FEU Diliman, FEU Cavite, FEU Makati and FEU High School Inc. In April 2016, FEU entered into a share purchase agreement to acquire an initial 80 percent of Roosevelt College Inc.
For the past four years, FEU’s consolidated assets have grown by an average annual rate of 13.3 percent while consolidated stockholders’ equity has expanded by an annual average of P625.78 million or 8.5 percent a year. —DORIS DUMLAO-ABADILLA
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