Premiere Entertainment acquires control of Next Mobile for P6.5-B

Publicly-listed movie production outfit Premiere Entertainment Productions Inc. will acquire a controlling interest in telecommunications firm Nextmobile Inc. for P6.58 billion, the company told the Philippine Stock Exchange (PSE).

Nextmobile (formerly Nextel Communications Phils. Inc.) is owned by a consortium composed of Finnish, Swedish, American and Filipino entrepreneurs led by Mel Velarde.

PEP president and chief executive officer Anastacio P. Diaz Jr. said the acquisition will be done through a share-swap transaction.

In view of this development, the PSE has suspended trading of PEP shares effective yesterday until the terms and conditions of the transactions, and details pertaining to the business or project acquired have been fully disclosed and if applicable, the latest audited financial statements of the unlisted company are submitted to the bourse.

The acquisition of Nextmobile is in line with PEP’s diversification into the telecommunications and information technology businesses to boost its income.

Preparatory to the acquisition, the company’s board approved the change in its primary purpose from entertainment to telecommunications.

In line with this, the company will undertake a capital restructuring aimed at cleaning its balance sheet. The restructuring involves the reduction of its authorized capital stock from P1 billion to P500 million and thereafter increasing it to P7 billion through the acquisition of a controlling interest in Nextmobile in exchange for shares of stock.

With the continued slowdown in the movie-making industry since 1999, PEP had shut down its film production operations as well as its bingo activities and instead concentrated on roving cinema and film distribution businesses.

Nextmobile is similarly undergoing a major restructuring and will be concentrating on services different from what Nextel Philippines had focused on, which was in the area of trunked radio, pager and mobile phone services.

The company earlier launched its wireless Internet service, Nextel Online, which enables its users to surf the Internet as well as send and receive an e-mail through their handsets.

US-based Nextel International Inc., the parent firm of Nextel Phils., now has minimal ownership in the local company with Filipinos owning majority of the new firm.