APC Group Inc., a listed holding company controlled by Belle Corp., has signed an agreement with Philippine Global Communications Inc. (Philcom) and PremierGlobal Resources Corp. to convert Philcom’s debt into equity.
Under the agreement, APC’s deposit for future subscription with Philcom amounting to P3.05 billion will be converted into equity in the cash-trapped telecommunications firm as additional paid-in capital.
APC said this will have no effect on its financial statements since this deposit had been fully provided for in its books.
The agreement also calls for the conversion of Philcom’s P1.82 billion obligation to PremiereGlobal into equity, which shall be equivalent to 75 percent of Philcom.
In turn, APC’s shareholdings in Philcom will be diluted from 74 percent to 18 percent.
This, however, shall improve APC’s negative stockholders’ equity to a positive P79.6 million based on the company’s balance sheet as of March 31, 2007.
The agreement stipulates that for as long as the new shares have not yet been issued in favor of PremiereGlobal, APC shall execute a voting trust agreement in favor of PremiereGlobal over 75 percent of its existing shares, representing 74 percent of the capital stock of Philcom.
APC said the voting trust agreement shall be valid until such time that the shares shall have been issued to PremiereGlobal.