Bonham Strand Investments Ltd, an investment holding company in British Virgin Islands, is planning to acquire 69.67 per cent controlling stake in Philippine-based Medco Holdings Inc for up to $2.2 million (P110.58 million).
Medco earlier informed the local bourse that its board of directors approved the British firm’s subscription to more than 2.2 million new common shares from the corporation’s increase in authorised capital stock from 700 million to 9.4 billion common shares priced at P0.05 apiece.
Medco noted it will file for the listing of the subscription shares with the Philippine Stock Exchange (PSE) after the Securities and Exchange Commission (SEC) approves the corporation’s increase in capital stock worth $9.481 million (P470 million).
“The transaction will give [Medco] a healthier balance sheet with an increase in its equity and asset base and a decrease in its liabilities,” the holding firm said in its statement.
Medco added the increase in its authorised capital stock will enable the company to raise more funds by issuing more shares from its unissued shares.
Bonham Strand Investments is backed by Millennium Empire Holdings Ltd, an investment holding company incorporated on January 4, 2016 in the British Virgin Islands. Its sole investment is in the shares of stock of Bonham Strand Investments.
Medco noted the British firm’s investments will solely be in the issued shares and has no plans to engage in any other active business pursuit.
Besides Bonham Strand Investments, individual investor Xu Hanjiang agreed to subscribe to over 258.1 million common shares to be issued by Medco, which will represent 8.17 per cent of the planned increase in capital stock.
Medco expects its public float to decrease from 53.95 per cent to 20.12 per cent, and foreign ownership to increase from 54.01 per cent to 89.81 per cent after the transactions.
Hong Kong-based private company Citivest Asia Limited, which currently owns 46.05 per cent stake in Medco, is projected to decrease its stake to 10.2 per cent once all deals are completed.
Medco’s last trading price increased 4.29 per cent or P0.030 to close at P0.73 per share on Tuesday (June 13).