Premiere Entertainment to complete purchase of NextMobile by October

Premiere Entertainment Productions Inc. (PEP) expects to complete its purchase of a 97-percent stake in Next Mobile Inc. by October this year, the company told the Philippine Stock Exchange (PSE) yesterday.

PEP president and chief executive officer Anastacio Diaz Jr. said the share-swap deal between PEP and Nextmobile shareholders is expected to be consummated on or before Oct 21, 2004 provided that certain closing conditions are met such as the approval of the concerned regulatory authorities and the issuance by the Bureau of Internal Revenue (BIR) of a tax opinion finding the transaction to be tax deferred.

Under the agreement forged in November last year, PEP will acquire a total of 13.56 million common shares of Nextmobile for P6.58 billion.

In exchange, PEP will issue 13.16-million shares to Nextmobile shareholders,

Top Mega Enterprises Ltd., Joycelink Holdings Ltd., Gamboa Holdings Inc., Emerald Investments Inc. and Foodcamp Industries and Marketing Inc. The 13.16-million shares represent 96.2 percent of PEP’s outstanding capital stock.

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

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 board approved the change in its primary purpose from entertainment to telecommunications.

In line with this, PEP 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.

In light of 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.