Solid Group, Destiny Cable set to OK revised swap deal

Publicly-listed holding firm Solid Group Inc. (SGI) will be consolidating the operations of the multi-media Destiny Group through a revised share-swap deal worth about P215 million.

SGI corporate information officer Enrique Ligeralde told the Philippine Stock Exchange that the company’s board of directors will meet on Sept. 24 to approve the acquisition of Destiny Cable Inc. and/or Destiny Inc. under new terms and conditions.

The share-swap was supposed to take place three years ago but the prolonged delay in the approval by the regulatory authorities had forced the parties to rescind the original agreement and renegotiate the deal.

The original transaction would have involved the transfer of DCI’s investment in Destiny Inc. in exchange for the issuance of 673,844,980 SGI shares priced at P2.30 each or an equivalent of around P1.5 billion.

But with the delay in the approval process and the downturn in the equities market, SGI stocks have since slid, closing last week at only 32 centavos per share.

Both SGI and the Destiny Group are majority owned by the family of businesswoman Elena Lim.

With the planned acquisition, the Destiny Group will be restructured so that the broadband cable infrastructure assets will be owned by Destiny Inc. and the franchise to operate cable facilities and the assets directly necessary for the franchise will be retained by Destiny Cable. Destiny Inc., which will become a wholly- owned subsidiary of SGI, will thereafter lease its facilities to Destiny Cable.

SGI, in turn, will invest in bonds or warrants of the holding company, which will be convertible to 100 percent of the issued capital stock of Destiny Cable.

SGI, formerly known as United Paracale Mining Co., is primarily engaged in the manufacture, distribution, and export of consumer electronic products. It operates production facilities for the manufacture of TV, video, and audio under the Sony and Aiwa labels. But last year, its wholly-owned subsidiary Kita Corp., whose principal customer is Japan’s Aiwa Co. Ltd., suspended its manufacturing operations at the Clark economic zone due to the lack of production orders.

The Destiny Group, meanwhile, is engaged in the multimedia business. In June 1996, DCI obtained a 25-year franchise from the government to engage in cable TV, data and other business like high-speed Internet and leased line services, cable telephony, VSAT services, broadcast uplink and programming services.