Raslag [ASLAG 1.02, down 1.0%; 381% avgVol] [link] updated investors to say that its shareholders have approved a measure to convert 100 million of its unissued common shares to preferred shares. The preferred shares are redeemable, non-voting, cumulative, non-participating, non-convertible, and come with no pre-emptive rights. ASLAG said the prefs “open an opportunity for ASLAG to raise funds for its pipeline and other expansion projects in support of its vision of having at least a 1000 MWp capacity by 2035.” ASLAG added that it aims to “tape other funding resources without necessarily diminishing the voting power and other rights of existing common stockholders.”
MB bottom-line: ASLAG’s goal of having 1,000 MWp of renewable energy capacity by 2035 is ambitious, and renewable energy development is costly. I like to see our young RE firms thinking ahead and getting a little creative with their sources of funding because if there’s anything I hate, it’s wasted construction capacity. While it might be hard to get GSIS to buy up its entire batch of prefs (that “long only institutional buyer” is currently in hot water with the Commission on Audit for its misadventures in the PSE under Wick Veloso), there will be no shortage of potential buyers for a company like ASLAG that has demonstrated a history of paying dividends to shareholders. Why prefs? Well, selling common shares to the public right now is not going to get ASLAG the best price (“sElLiNg eQuItY? iN tHiS eCoNoMy?”), plus there are a large number of Nepomuceno Family members who own shares directly in ASLAG that perhaps are not interested in dilution at this time. I don’t have any insider info on this, just looking at the cap table and speculating.
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