DMCI HOLDINGS, Inc. has secured stockholders’ approval to issue P10 billion in preferred shares to Dacon Corp., the Consunji group’s private holding company, for the acquisition of Cemex Holdings Philippines, Inc. (CHP).
The issuance involves 10 million Class B preferred shares at P1,000 each, via private placement.
The move was approved during a special stockholders’ meeting on Tuesday.
“The reason for the financing is for us to be able to raise P10 billion for the 56.75% acquisition of Cemex Asian South East Corp. (CASEC). It does not intend to dilute the voting rights of the common shareholders. It will strengthen the balance sheet as it is treated as equity capital,” DMCI Holdings Chairman and President Isidro A. Consunji said during the meeting.
“Furthermore, the convertibility option provides the flexibility in managing the capital structure and optimizes the cost of capital,” he added.
Mr. Consunji said that DMCI remains committed to its dividend policy of at least 25% of the company’s previous year’s core net income amid the share issuance.
“The primary consideration for funding the acquisition is to optimize the financing costs and limit the impact on common shareholders’ dividends while providing mutual benefits for the investors and the company. With fixed interest rates, the annual dividend rate is at 4%,” Mr. Consunji said.
Last month, DMCI, through Dacon Corp., announced a P1.94-billion mandatory tender offer to acquire the remaining 10.14% of CHP.
The tender offer plans to buy up to 1.37 billion publicly owned CHP common shares at P1.42 apiece, equivalent to 10.14% ownership. The offer period will be from the morning of Oct. 23 up to noon of Nov. 21.
Under the planned acquisition, Dacon has been appointed as the bidder for the mandatory tender offer to acquire the remaining 10.14% of CHP’s total issued and outstanding capital stock.
In April, DMCI, Semirara Mining and Power Corp. (SMPC), and Dacon Corp. announced the acquisition of CHP for $305.6 million via a share purchase agreement.
DMCI will buy the entire share of Cemex Asia B.V. in CASEC, the majority owner of CHP with an 89.96% equity interest. DMCI will acquire a 56.75% stake in CASEC, Dacon will secure 32.12%, and SMPC will purchase the remaining 11.13%.
On Tuesday, DMCI shares dropped by 1.01% or 12 centavos to P11.72 per share. — Revin Mikhael D. Ochave