SEC approves Fortune Cement’s capital increase

The Securities and Exchange Commission (SEC) has approved Fortune Cement Corp.’s plan to raise its capital stock from P3.03 billion to P4.23 billion to facilitate its merger with Continental Operating Corp.

The new capital base will consist of 4.2 billion common shares and 32 million preferred shares of which P3.78 billion worth of shares have been subscribed and paid.

Fortune is absorbing Continental Operating Corp. to expand market share and enhance operating efficiency.

As agreed upon, Fortune, the surviving company, shall acquire the P1.61-billion assets of Continental and assume all its liabilities.

In exchange for the net assets transferred, Fortune shall issue 1.12 billion shares to the majority stockholder of Continental. The issue price for each Fortune share is at P1.44 per share or equal to the book value of each Fortune share prior to merger.

The merger is expected to result in the consolidation of two well-established brands and single statutory audit and reportorial requirements. It is likewise seen to enhance credit rating as a result of a larger market share and asset base.

Continental is engaged in the business of manufacturing cement and is presently owned by Republic Cement Corp., which also owns majority of the outstanding capital stock of the company

Fortune Cement’s stock was last traded on May 5 at P0.62 per share.