SEC approves Now Corp’s move to wipe out deficit

MANILA, Philippines — Listed technology company Now Corp. has received the Securities and Exchange Commission’s approval to eliminate its accumulated deficit, which will help ramp up its financing and expansion.

In a statement, Now Corp. said it received the go-signal from the SEC to wipe out its P402 million deficit by reducing its surplus of P455 million.

“The elimination of the deficit removes a major obstacle to fundraising,” Now Corp. said.

The company said it also has a pending application filed with the SEC to convert outstanding shareholders’ advances of P264 million to equity.

Once approved, the company’s debt-to-equity ratio will improve from 0.70:1 to 0.37:1. Post debt-to-equity, equity will account for 73 percent of total assets as compared to 59 percent prior to conversion.

Now Corp. said the two corporate actions will strengthen its financial condition.

“The above corporate initiatives will support the company’s plan to raise funds either from the capital or debt markets,”   the company said.

It added that the funds will be utilized primarily for the capital expenditures of its rapidly growing fixed wireless broadband service as it expands its footprint outside of its Metro Manila core market.

“Demand for broadband is growing rapidly in many heretofore underserved or unserved areas and the company will leverage its wireless capability to reach these markets. Wireless solution is superior to fiber cable-based infrastructure in terms of ease, time and cost to deploy,” Now Corp. said.

Moreover, the company said its initiatives to strengthen its balance sheet are part of its preparations to fuel the company’s growth in its existing core business in the near term.

“Foundations for organic and fundamental growth are now being put in place in order for Now to excel in the industry as the fixed wireless internet provider of choice,” Now Corp. chief operating officer Rodolfo Pantoja said.

“We are banking on these changes as we strengthen further our financial health as we institute and excel in service excellence to our clients,” he added.

Earlier this week, Now Corp. affiliate Now Telecom Inc. received the National Telecommunications Commission’s nod for the extension of its authority to install, operate and maintain an effective and economical telecommunications network, including mobile telecommunications, data and voice telecom network, trunked radio dispatch communications system, digital trunked radio system and telecommunications operations.

It also includes the upgrade of its existing system to a nationwide wireless communications network which will provide mobile telephony communications and multimedia transmission capability to all cities and municipalities nationwide.

Pantoja said the NTC’s approval shows the government’s efforts in promoting competition by further liberalizing the telecommunications industry.