Listed NOW Corp. has secured regulatory approval to restructure its capital, a prelude to potential fund-raising to support its broadband business.
NOW said on Friday that the Securities and Exchange Commission (SEC) had approved its application to wipe out its deficit of P402 million as of last year by reducing its surplus of P455 million.
“The equity restructuring to wipe out the deficit as of Dec. 31, 2018, pertains to the deficit accumulated by the parent company, and does not include the consolidated deficit incurred with affiliates and subsidiaries,” NOW said in its stock exchange filing.
In a statement, NOW said it had a pending application before the SEC to convert P264 million in shareholders’ advances to equity.
NOW said the restructuring would strengthen its financial condition and remove a key obstacle to raising money from the capital markets.
“Foundations for organic and fundamental growth are now being put in place in order for NOW to excel in the industry as the fixed wireless internet provider of choice,” Rodolfo Pantoja, NOW chief operating officer, said in a statement.
“We are banking on these changes as we strengthen further our financial health as we institute and excel in service excellence to our clients,” he said.
NOW said eventual fund-raising would be pursued via the equity or debt markets.
“The funds will be used primarily for the capital expenditures of its rapidly growing fixed wireless broadband service,” it added.
In particular, the company wants to tap broadband markets outside Metro Manila, where it currently operates.
“Demand for broadband is growing rapidly in many underserved or unserved areas and the company will leverage its wireless capability to reach these markets,” NOW said.
NOW partly owns NOW Telecom, which holds a 25-year congressional franchise to establish and operate a nationwide cellular mobile telephony system.