Music Corp aborts restructuring plan

Music Corp., a Philippine-listed investment holding firm, said it would not push through with the planned corporate restructuring program intended to consolidate its assets into a special purpose vehicle (SPV).

In a disclosure to the Philippine Stock Exchange, Music Corp. corporate secretary Jimmy Soo said the company’s board of directors has voted to abandon the restructuring plan, approved by the stockholders late last year, and instead continue in its efforts to tap strategic investments in upstart information technology ventures.

Music, locally incorporated and listed at the PSE since 1996, holds a diversified portfolio of investments in key "early stage" companies in the networking infrastructure, telecommunications and Internet markets, developing them into attractive prospects for strategic mergers or acquisitions.

Last year, Music sold its entire 19 percent stake in US-based affiliate Music.com as the subsidiary struggled to cope with mounting losses as a result of stiff competition and the global slowdown in the growth of the Internet-related business.

The sale of the music portal still left Music with several key companies under its fold, including the US-based Music Semiconductors, Music Telecom and Protelcon; the Holland-based Museum Electronics and the Philippine-based Music Manufacturing Technology Inc.

Under the planned restructuring, Music would form and own an SPV (music Holdings) to transfer the domicile of the group holding company and to realize value from the sale of the company as a separate listed entity.

To implement the share transfer, there will be an exchange of shares between MH and Music worth about P446 million, consisting of stocks in Music Semiconductors and Music Manufacturing.

The new company will be incorporated in Bermuda, rather than in the Philippines, and will explore the possibility of listing on the Nasdaq counter in the US to facilitate the entry of more foreign investors. – Conrado Diaz Jr.