National Book Store sells control of Vulcan for P5.7-B
Vulcan Industrial [VUL suspended] [link] provided comprehensive disclosure on the transaction that will see the backdoor listing of the East Coast Mineral Resources Company (ECMRC) for a total consideration of P5.66 billion.
The actual steps of the deal are moderately complicated, but the end result is that the ownership group of ECMRC will buy enough shares from National Book Store and enough primary shares directly from VUL (now ECVC) from a raise in authorized capital stock to result in the ECMRC ownership group owning 85% of the outstanding shares of ECVC.
It will also result in ECVC owning 100% of ECMRC, which owns three Mineral Production Sharing Agreements, and reports to have generated P503 million in net income in FY21 and P363 million in net income in FY22. Additionally, the public float will be reduced to about 14.5%, which is why VUL (now ECVC) was suspended and remains suspended until now.
MB BOTTOM-LINE
I’m glad whenever a non-operational shell company like VUL is picked out of the PSE orphanage by some upstart team like the ECMRC ownership group, and is given the chance at a good and productive life.
At the same time, I’m not a huge fan of backdoor listings, and the company’s plan to increase its public float won’t include a follow-on offering or any other sale to the public that would necessitate a prospectus or similar disclosure.
The plan is for the acquiring owners to either sell the partially-paid shares it received from National Book Store to some third party, or for ECVC to sell some primary shares to some third party, or for there to be a combination of those two sales.
ECVC said that will look to complete these transactions through July and August, and that it anticipates the resulting public float to be somewhere between 22.97% to 24.64%. Sounds good, but I’m just wondering why SP New Energy [SPNEC suspended], which has been suspended for much longer, wasn’t also required to formally answer for its float compliance plan.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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