In a registration statement filed with the Securities and Exchange Commission, Philtread said it will offer 500 million new shares at the offer price of P2 per share together with 100 million detachable warrants that are convertible into common shares.
Shareholders can subscribe to five rights shares for every one common share held as of a record date yet to be set by the company. Those who subscribe to the rights shares will be issued warrants for free at the ratio of one warrant for every five rights shares purchased at the exercise price of P2 per share. Each warrant shall also entitle the holder to subscribe to one common share.
The warrants, which will be listed at the Philippine Stock Exchange, may be exercised over a two year period. As of July 31, 2002, shares of Philtread closed at P4.50 per share.
Philtread is owned by ATR-King Eng Capital Partners Inc. (40.45 percent), Philex Mining Corp. (24.74 percent), Bridgestone/Firestone Inc. (13.14 percent) and Motherwell Inc. (5.95 percent).
The board of Philtread will change its name to ATR King Eng Financial Corp. to reflect its new primary business.
The company will continue its diversification into related financial services-related businesses that can provide recurring and stable earnings to the company.
Philtread was incorporated in October 1930 as Firestone Tire & Rubber Co. of the Philippines to engage in the manufacture of automotive tires under the "Firestone" brand.
In 1993, the company began to incur heavy business losses due to slowdowns in production brought about by severe labor problems and the unabated dumping of foreign tires in the country, which adversely affected the local tire industry. Crippled by its huge debt, Philtread halted manufacturing operations at its tire plant and closed the facility to prevent further losses.
With the sale of its properties and assets, Philtread became an investments holding company whose main assets were a 60-percent equity in Sucat Land Corp. and a small minority shareholding in MSF Tire.