Velarde Inc. pumps more money into NOW for telco venture

Velarde Inc., a vehicle of Now Corp.’s president and CEO Mel Velarde, has injected more money into Now which will be used to bankroll the company’s telecom venture.

In its disclosure, Now said Velarde has fully paid its additional subscription to the company equivalent to about a 5.75-percent stake in the listed firm, worth some P289.5 million. The said infusion comes after Now indicated that its telecom affiliate Now Telecom Co. Inc. will go public by way of introduction.

Velarde previously owned a 9.31-percent stake in Now.  In its meeting last August, Now’s board has approved Velarde’s additional subscription of 102 million common shares of the company at a price of P2.25 apiece or about P229.5 million. It will also subscribe to 60 million redeemable and convertible preferred shares of Now at P1 apiece.

The said preferred shares comes with one free detachable warrant for every preferred share subscribed, exercisable after the second year anniversary.  “Proceeds from the placement are intended for the company’s additional equity infusion in its affiliate, Now Telecom Co., Inc., and for other general corporate purpose the details of which shall be disclosed at the appropriate time when the terms and conditions become final,” the company said.

Now said it recently received from the Securities and Exchange Commission the certificate of approval of valuation confirming the valuation of shareholder Velarde Inc.’s advances amounting to P209 million as payment for the additional issuance of 32.15 million common shares worth P22.5 million with a par value of 70 centavos per share. The said shares came out of the unissued portion of the present authorized capital of Now, based on the conversion price of P6.50 per share.

Now Telecom recently appointed Unicapital Inc. as its financial advisor for a planned corporate restructuring as well as issue manager and financial advisor for a planned listing by way of introduction in the Philippine Stock Exchange.

Together with its advisor, Now Telecom is also assessing the suitability of listing its shares on the local bourse or within the region, given its medium-term business plans, the company said.

By: VG Cabuag|BusinessMirror

Source: Peso Economics