EEI Corporation, the Yuchengco Group’s construction unit, is planning a follow-on offering of up to P6 billion worth of preferred shares to fund its participation in the government’s infrastructure projects.
In a disclosure to the Philippine Stock Exchange, EEI said its Board of Directors has approved and authorized the plan for a base offer of up to P4 billion worth of preferred shares, with an over-subscription option of up to P2 billion at an offer price of up to P100.00 per share.
However, prior to the offering, the firm also plans to amend Article 7 (2nd paragraph) of its Articles of Incorporation such that, “All stockholders shall have no pre-emptive rights with respect to any shares of any other class or series of the present capital or on future or subsequent increases in capital.”
EEI said the amendment is “in order to facilitate the issuance of the said preferred shares, and to make the preferred shares to be issued comparable to similarly situated shares issued in the market.”
The firm stressed that “the proposed Preferred Shares would be fair, transparent and equitable to all shareholders. All relevant approvals will be sought from, and appropriate disclosures would be made to, the Securities and Exchange Commission and the Philippine Stock Exchange.”
The matters will be submitted for shareholders approval through written assent, to be reckoned tentatively on August 26, 2021, with shareholders on Record Date on August 16, 2021.
“With the advent of new mega-infrastructure projects being projected to be issued by the Government, the Corporation seeks to raise additional capital in order to position itself to take advantage of this opportunity,” said EEI.
Thus, it seeks to issue preferred shares to improve EEI’s contracting capacity, mitigate any lengthened cash conversion cycle on existing projects, strengthen its equity base, improve debt to equity ratio, and to hedge against any future credit crunch.