Premiere Entertainment Productions completes buyout of Next Mobile Inc

Premiere Entertainment Productions Inc. has signed an agreement with shareholders of Next Mobile Inc. for the acquisition of a controlling interest in the telecommunications firm.

In a disclosure to the Philippine Stock Exchange yesterday, PEP said it had entered into a memorandum of agreement with Top Mega Enterprises Ltd., Joycelink Holdings Ltd., Gamboa Holdings Inc., Emerald Investments Inc., Foodcamp Industries and Marketing Inc. for their purchase of PEP shares in exchange for a 97 percent stake in Next Mobile.

PEP will acquire a controlling stake in Nextmobile for P6.58 billion.

PEP said the subscription of shares will take place after both companies have completed their respective capital restructuring. Nextmobile shareholders are expected to control approximately 96.2 percent of PEP.

Nextmobile (formerly Nextel Communications Phils. Inc.) is owned by a consortium composed of Finnish, Swedish, American and Filipino entrepreneurs led by Mel Velarde.

The acquisition of Nextmobile is in line with PEP’s diversification into the telecommunications and information technology businesses to boost its income.

Preparatory to the acquisition, the board approved the change in its primary purpose from entertainment to telecommunications.

In line with this, the company will undertake a capital restructuring aimed at cleaning its balance sheet. The restructuring involves the reduction of its authorized capital stock from P1 billion to P500 million and thereafter increasing it to P7 billion through the acquisition of a controlling interest in Nextmobile in exchange for shares of stock.

In light of the continued slowdown in the movie-making industry since 1999, PEP had shut down its film production operations as well as its bingo activities and instead concentrated on roving cinema and film distribution businesses.

Nextmobile is similarly undergoing a major restructuring and will be concentrating on services different from what Nextel Philippines had focused on, which was in the area of trunked radio, pager and mobile phone services.

The company earlier launched its wireless Internet service, Nextel Online, which enables its users to surf the Internet as well as send and receive an e-mail through their handsets.

US-based Nextel International Inc., the parent firm of Nextel Phils., now has minimal ownership in the local company with Filipinos owning majority of the new firm.