Now Corp. raising capital via ‘top-up’ placement scheme

Telecom, media and technology holding firm Now Corp. is proceeding with a plan to beef up capital by as much as P800 million from the sale of shares to a few selected investors.

Now’s board of directors approved the offering of 160 million or 8.14 percent of its total issued and outstanding shares based on a 5-percent discount to the 30-day volume-weighted average price, the company disclosed to the Philippine Stock Exchange on Tuesday.

Proceeds from the offering will fund Now’s expansion projects, the disclosure said.

Led by businessman Mel Velarde, the company has three key operating business segments: software licenses and services; IT manpower and resource augmentation; and broadband and wireless cable TV services.

The offering will be done through a “top up” placement, whereby an existing shareholder will initially sell secondary shares but will eventually buy the same number of primary shares at the same price out of the company’s authorized capital stock. Lending the shares allows for a quicker capital-raising deal.

Private transaction

In this case, the disclosure said the shares would be sold to “qualified” buyers or sophisticated institutional investors and/or to no more than 19 nonqualified buyers, which means it will be a private transaction rather than a public offering.

Now’s board likewise approved the renewal of the mandate of PNB Capital and Investment Co. for one year beginning Dec. 13, 2021, as issue manager, financial advisor and bookrunner for this top-up placement transaction.Cruz Marcelo & Tenefrancia Law Firm was retained as the transaction counsel.

On reports about unpaid supervision and regulation fee (SRF) imposed by the National Telecommunications Commission (NTC) on the company’s affiliate, Now Telecom Co., the latter clarified that prior to 2005, Now Telecom had been assessed with and was paying SRF in the amount of less than P10 million.

“In 2005, NTC computed the SRF at P126 million which is being contested up to this time in court,” the disclosure said.

“Contrary to news articles, Now Telecom does not have a debt in the amount of P2.6 billion. To date, there is no final amount of SRF which is due and demandable … Telecom has been diligently paying its annual SRF, exclusive of the contested amount, as recent as for the year 2021,” it added.