EEI Corporation, an affiliate of the Yuchengco Group, is raising P6 billion from the issuance of preferred shares to fund its real estate and power businesses.
In a disclosure to the Philippine Stock Exchange (PSE), the firm said its board had approved the issuance of 60 million preferred shares, to be denominated as Preferred Shares Series “D,” with a par value of P0.50 from its unissued preferred shares.
These preferred shares will be issued at an offer price of P100 per share for an aggregate value of P6 billion by way of private placement.
The preferred shares shall be cumulative, non-voting, non-participating, non-convertible, and non-reissuable. The preferred shares are perpetual unless EEI exercises its sole option to redeem them at year five from the date of issuance.
The net proceeds of the offering shall be used to fund the real estate and power initiatives of the company and for general and working capital requirements.
The transaction qualifies as an exempt transaction from the registration of securities with the Securities and Exchange Commission (SEC) by virtue of Section 10.1(k) of the Securities Regulation Code.
Last November, EEI said it was raising P2 billion from the private placement of preferred shares to pay for loans and fund future projects.
The firm said its board of directors approved the proposed issuance of 20 million Series C preferred shares at P200 per share by way of private placement by RCBC Trust Corporation.
EEI said the offer or issue value for the transaction was the same issue value during the firm’s follow-on offering in Dec. 9 to 15, 2021, of up to 60 million preferred shares with a base offer of 40 million shares issued in two series (Series A and B) from EEI’s 240 million preferred shares.
The 20 million preferred shares with a par value of P0.50 will come from EEI’s unissued preferred shares, which are cumulative, non-voting, non-participating, non-convertible, redeemable, and non-reissuable.
The shares are perpetual unless EEI exercises its sole option to redeem them at the seventh year from the date of issuance.
The dividend rate for the preferred shares has been set at 6.75 percent per annum payable quarterly starting on the third month from the date of issuance.
“The conduct of an equity fund raising by way of a private placement allows EEI to raise equity funds in a most expeditious and efficient manner, with the least cost to EEI,” the firm said.
It added that “the net proceeds of the offer shall be used to strengthen the balance sheet, retire working capital loans, fund the company’s future projects, and for general and working capital requirements.”