IT firm to raise P122M via stock rights offering

Information Technology firm Island Information and Technology Inc. (IITI) plans to raise around P122.14 million through a stock rights offering to finance its container yard depot and logistics services business and other working capital requirements.

The company will offer a total of 12.214 billion shares at P0.01 per share to shareholders as of April 1. Shareholders can buy five shares for every two shares held as of the record date.

The shares, which will represent 71.43 percent of the total issued and outstanding capital stock of the company after the offer, will come from the increase in IITI’s authorized capital from P50 million to P500 million.

Tapped as lead underwriter for the issue is Amalgamated Investment Bancorporation.

Bulk of the proceeds from the offering or P108.4 million will be used for the acquisition of equipment and IT infrastructure for the company’s container yard depot business. The balance will be used to strengthen the company’s permanent working capital in anticipation of increased business activity in the coming years.

IITI envisions itself to be a premier provider of cargo management services through the management and operation of container yard depots in strategically located areas adjacent to key ports in the country.

A container yard depot stores imported goods brought into the country by various shipping companies. The cargo that is temporarily stored in these yards are then picked up by customer brokers who then take care of delivering these goods to the importer concerned and return the empty containers to the depot where the importers unload and vacate the containers.

The idea to go into container yard depot operations was broached last year in view of the anticipated growth in the economy.

"The feasibility of being a new player is supported by the fact that trade activity in the country seems to be poised to continue strong growth and this requires the support of shipping and cargo management services.

Apart from this, the company will revert to the mining business due to renewed interest in the sector after the Supreme Court allowed foreigners to own as much as 100 percent of local mining firms.

IITI was initially established to take advantage of the mining opportunities offered by the country’s rich natural resources. It, however, shifted its interests to IT services in May 2000 in a move designed to position itself in the information age.

IITI said it shall continue to engage in IT including the development, licensing, and maintenance of computer software but not limited to Internet applications, internet, extranet and other telecommunications value added services to any and all types of information technology users in the local, regional and global markets.