Globe corporate secretary Renato Marzan told the Philippine Stock Exchange that the company’s board of directors has approved the issuance of 20 million convertible preferred "Series B" shares at a par value of P50 each.
Aside from its common shares, Globe has lately been actively tapping the equities market with the issuance of other capital-raising instruments such as warrants, preferred "Series A" and Philippine Deposit Receipts (PDRs).
Preferred shares allow its holders to receive dividends before any dividends are paid to the holders of common stocks. However, preferred stocks usually have a specified limited rate of return or dividend and a specified limited redemption and liquidation price.
The P1-billion minimum proceeds from the preferred share issue will increase the company’s authorized capital stock from P11.25 billion to P12.25 billion.
In addition, Marzan said another 16 million common shares, also valued at P50 par, would be offered in one or more transches or private placements, except through pre-emptive rights which will be waived by the existing shareholders.
Marzan said the Globe’s board has yet to determine the issue price and the dividend rate and payment terms for these shares which will have voting rights and can be owned by both Filipinos and foreigners.
Globe’s capital call comes on the heels of the formalization of the integration of cellular service provider Isla Communications as a wholly-owned Globe subsidiary.
Last March 5, the two parties and their principal stockholders (Ayala Corp. and Singapore Telecom for Globe and Asiacom Holdings and DeTeAsia Holdings for Islacom) signed a share-swap agreement which, upon approval by the PSE and SEC, will have Islacom subscribing to 28,830, 860 new common and 158, 515, 021 preferred "Series A" of Globe in exchange for 100 percent of Islacom’s issued and outstanding stocks.
The transaction is valued at an estimated $1.6 billion.