NOW Telecom Co. Inc. (NOW Tel) yesterday said it has secured the Securities and Exchange Commission’s (SEC) approval for its equity restructuring which allowed the company to eliminate its deficit.
The corporate restructuring includes the increase of its authorized capital stock and the quasi-reorganization of its equity.
As a result of the approved application, NOW Tel increased the number of its authorized common shares from 14.59 million to 952.09 million and lowered its par value from P100 per share to P1.00 per share.
Last June 24, 2021, stockholders of NOW Corp. approved the increase of the company’s stake in NOW Tel for a total of P600 million, which was part of the proceeds from the placement received from the equity subscription of Velarde Inc. to NOW Corp.
The additional subscription from NOW Corp. and other shareholders supported the increase in authorized capital stock of NOW Tel.
The SEC also certified the approval of the equity restructuring to fully wipe out NOW Tel’s deficit as of Dec. 31, 2020.
The quasi-reorganization has allowed NOW Tel to eliminate its deficit, which enables it to declare dividends to its shareholders from its unrestricted retained earnings that may be generated subsequent to the quasi-reorganization.
“This strategic initiative of NOW Tel is envisioned to support its growth plans. The three-step equity restructuring better positions NOW Tel for investors both domestic and foreign to participate in its equity,” Rene Rosales, NOW Telecom president and chief operating officer, said in a statement.
“With the amended Public Services Act allowing up to 100 percent foreign ownership in public utility companies and this recent approval from SEC, NOW Tel can now proceed in its growth plans starting with its fundraising efforts including but not limited to tapping either the debt market or equity market, or both,” Rosales added.
Last month, NOW Tel received a favorable ruling from the Anti-Red Tape Authority (ARTA).
ARTA reiterated its earlier resolution declaring the completeness of NOW Tel’s application and its order to assign the spectrum ranging from 1970Mhz-1980Mhz paired with 2160Mhz to 2170Mhz and 3.6Ghz to 3.8Ghz, including 5G frequencies for mobile and fixed wireless, to the company.
