Now Corp. increases stake in telco unit, gets trading suspended
Businessman Mel Velarde’s Now Corp. is raising its stake in telco license holder Now Telecom Co. Inc. in a potential backdoor listing move.
Now Corp., which provides broadband and information technology services, said in a stock exchange filing on Friday its board approved the increase of its Now Telecom stake to 24.23 percent from 19 percent through a series of transactions valued at P1.2 billion.
The Philippine Stock Exchange (PSE) said the deal would fall under its rules covering substantial acquisitions and reverse takeovers, also known as backdoor listing.
The bourse has suspended trading of Now Corp. until the company could provide a more comprehensive disclosure on the transaction.
Now Corp. said in its filing it would acquire shares in Now Telecom by converting existing advances of P130.5 million and deposits of P469 million. Moreover, it will subscribe to 1 million shares at a price of P600 each or a total of P600 million.
The company’s board also approved the sale of shares to raise P800 million for expansion purposes.
It said up to 160 million common shares held by an existing stockholder would be sold to qualified buyers, although details such as price and timing were not yet available.
Now Telecom holds a government license to build, operate and maintain telecommunications facilities across the country.
Last December, Now Telecom signed a memorandum of understanding with Finnish technology giant Nokia Corp. as part of plans to roll out a standalone 5G network.
The company was seeking radio frequencies from the government and earlier this year said it had won the backing of the Anti-Red Tape Authority for its application dating back to 2005.
Last Feb. 15, the PSE penalized Now Corp. for delayed disclosures and issuing a statement claiming that Now Telecom was the country’s “fourth telecommunications player” without sufficient basis. INQ
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