The Securities and Exchange Commission (SEC) has approved the application of Monde Nissin Corporation for a quasi-reorganization in order to wipe out a capital deficit of P7.15 billion.
In a disclosure to the Philippine Stock Exchange, the firm said that, under the equity restructuring, it will wipe out the deficit with the use of its additional paid-in capital (APIC) amounting to P46.52 billion.
On March 29, 2023, Monde’s Board of Directors approved the plan to pursue an equity restructuring (offsetting deficit against paid-in capital in excess of par value) subject to the availability of the final Deficit amount in the 2022 audited financial statements (AFS), through management.
The management determined that the amount of Deficit to be eliminated is P7.15 billion based on the AFS as of December 31, 2022.
“The equity restructuring will not involve a change in the par value of Monde’s shares nor will it require an infusion of any additional paid-in capital; neither will the equity restructuring result in any change in the number of Monde’s issued, outstanding, or listed shares,” the firm said.
The deficit is a result of the P20.5 billion loss Monde booked as a result of the negative revaluation of its meat alternative business. It reported a non-cash, non-operating impairment of the intangible assets of Marlow Foods, which owns Quorn and Cauldron.
The impairment was caused by the application of a higher discount rate due to the prevailing higher interest rates and risk premiums, some margin compression, and rationalization of the trend in the meat alternative category.
For 2022, Monde said it incurred a P13 billion net loss due to a P19.6 billion non-recurring net loss of consisting mainly of impairment and restructuring costs for its Meat Alternative business, partially offset by the derivative gains from the unwinding of the cross-currency swap.