Tanduay capital hike OKd

The Securities and Exchange Commission (SEC) has approved the increase in Tanduay Holdings Inc.’s authorized capital stock to P25 billion.

This brings the Lucio Tan group closer to the planned consolidation of its major assets and a follow-on equity offering.

Prior to the mandate given by the SEC, the authorized capital of Tanduay—to be renamed LT Group Inc.—was P5 billion divided into five billion common shares with a par value of P1 each.

In a disclosure to the Philippine Stock Exchange, Tanduay said its new authorized capital of P25 billion consisted of 25 billion common shares with a par value of P1 each.

The bigger capital allows Tanduay to absorb P236.5 billion in total assets, in line with its transformation from a beverage unit to the LT group’s umbrella holding firm. Earlier, the SEC also approved the renaming of the company to LT Group Inc. but this has yet to be reflected in the PSE’s trading system.

A source from the LT group said the capital hike was among the remaining requirements that the group must meet before it could push through with the offering. Also, the sources said the group would still have to wait for the merger between Philippine National Bank and Allied Bank.

The merger between the two banks has been approved by the Bangko Sentral ng Pilipinas and Philippine Deposit Insurance Corp. but still is awaiting clearance from the SEC.

The assets to be folded into LT Group are the following: 90-percent stake in beer brewer Asia Brewery; 83 percent of cigarette manufacturer Fortune Tobacco Corp.; 98.1 percent of Eton Properties; 49.84 percent of flag carrier Philippine Airlines (post-recapitalization); 50.97 percent of budget carrier Air Philippines Corp.; 34.79 percent of Philippine National Bank; and 27.62 percent of Allied Bank.

After the consolidation, the LT Group plans to sell up to 3 billion common shares to the overseas market via a top-up placement as part of plans to widen its public float.  The equity placement will initially be done with the sale by its controlling stockholder Tangent Holdings of up to 3 billion shares at a price to be determined at the end of a book-building process.