PRESS STATEMENT: First Gen to Increase its Authorized Capital and Undertake a Stock Rights Offering
October 07, 2009
PRESS STATTEMENT: First Gen To Increase Its Authorized Capital and Undertake a Stock Rights Offering
October 07, 2009
First Gen Corporation today announced its intention to increase its authorized capital stock from Php3,270 million to Php7,250 million in line with the company’s stock rights offering of approximately Php 15 billion.
The proposed increase in authorized capital stock, which is subject to approval by the shareholders of the company and the Securities and Exchange Commission, comprises 3.23 billion common shares (with a par value of Php1.00 per share) and 1.5 billion voting preferred shares (with a par value of Php 0.50 per share).
The Company believes that the rights offering will strengthen the company’s balance sheet. The proceeds of the rights offering will be used to provide additional liquidity to manage the company’s debt position and for other general corporate purposes.
The company likewise believes that the rights offering is an equitable fundraising option because existing eligible shareholders will have the opportunity to subscribe their pro-rata shareholding in the company and thus not be subject to dilution. Allowing existing eligible shareholders to participate in a non-dilutive fundraising exercise by way of a rights offer was among the principal considerations of the equity financing transaction.
The quantum of the increase in authorized capital stock is intended to provide for the share capital requirements of the rights offer which may vary depending on the fluctuations in the company’s share price between now and the date the rights offer price is determined. The proposed increase in capital stock also takes into consideration the company’s need to maintain adequate authorized capital stock to allow for the issuance of additional shares related to adjustments in the conversion price of the company’s outstanding convertible bonds as a result of the rights offer and other corporate actions.
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