In a disclosure to the Philippine Stock Exchange (PSE), MIC said its board of directors has approved the subscription of 560 million of its common shares by the stockholders of IPII, which shall be paid in the form of common IPII shares hence resulting in MIC taking over majority control of the paper manufacturer.
Based on its last traded price, MIC stocks ended at 75 centavos each. But trading in the stock was halted yesterday pending more details on the subscritpion agreement signed last April 19.
In this case, the exchange will determine the applicability of the Rule on Additional Listing – the same rule waived on the controversial Itogon-Suyoc Mines Inc. (ISMI)-PhilWeb deal wherein a rights or public offering should first be undertaken before listing of shares offered through private placement, debt-to-equity conversion, share-for-share or property swaps, or other similar transactions.
MIC only has 180 million of its common shares listed at the PSE, only about a third of the additional 560 million new common shares to be issued.
The PSE also cited the rule on substantial acquisitions or reverse takeovers wherein a listed company or its subsidiary acquires an interest in an unlisted company more than 20 percent of the total book value of the listed firm, trading of the shares should be suspended until the terms and conditions are disclosed.
"After careful evaluation of various investment opportunities over the past two years, the board decided that the corporation should invest in IPII, a 14-year old paper manufacturing and converting company," MIC said.
It added the decision to invest in IPII was made after considering various factors such as IPII’s reputation for high quality premium products; strong position in the ruled paper market; established and extensive distributor network; strong supplier relationship; and strategically located mill and storage facilities.
MIC, formerly Armstrong Holdings Inc., is a holding company with particular interest in financial trading and financial services-related e-commerce businesses. It has a 20-percent stake in Armstrong Securities in partnership with EBC Capital Corp. and also partly owns thrift bank Orion Savings Bank together with the Tong Yang Group of Korea. – Conrado Diaz