By Revin Mikhael D. Ochave, Reporter
THE BOARD of listed investment holding company Ferronoux Holdings, Inc. has approved major transactions, including a P4.31-billion property-for-share swap with Eagle 1 Landholdings, Inc. and the issuance of 240-million shares to Themis Group Corp., resulting in changes in control and facilitating a backdoor listing.
The property-for-share swap involves the issuance of up to 918 million common shares at P4.70 apiece in exchange for approximately 9.4 hectares of land owned by Eagle 1 Landholdings in Parañaque, Ferronoux said in a stock exchange disclosure on Thursday.
The deal was approved by Ferronoux’s board during a meeting on Dec. 18.
“The real properties are adjacent to the Okada integrated casino resort. Currently, a portion of the property is being used to house the support facilities of the Okada casino complex, which will eventually be vacated once construction of the master-planned development commences,” Ferronoux said.
“The company and Eagle 1 intend to jointly develop the properties to realize the full potential value of the properties through the company’s resources, including, but not limited to, the ability to raise funds from the public,” it added.
Ferronoux said the shares involved in the swap will be issued following an increase in its capital stock.
Following the transaction, the Philippine Stock Exchange (PSE) implemented a trading suspension on Ferronoux shares, saying that the property-for-share swap deal is covered by the market operator’s revised rules on backdoor listing.
Backdoor listing occurs when an unlisted company acquires, merges with, or combines with a listed company, leading to significant changes in the business operations, board of directors, or voting structure of the listed company.
Aside from the swap deal, Ferronoux said its board also approved a private placement by Themis Group Corp. worth P240 million.
Under the private placement, Themis will subscribe to 240 million Ferronoux common shares at a par value of P1 apiece, to be paid in cash or in property.
The PSE said this is covered by the rule on additional listing of securities under Article V of the Consolidated Listing and Disclosure Rules of the exchange.
“Under the additional listing rule, the stockholders of the company must approve the transaction. Further, for related party transactions, the exchange, as a general rule, shall not permit the listing of shares subscribed by related parties unless a rights or public offering is first undertaken,” the PSE said.
Last week, Ferronoux forged a separate private placement deal with Themis involving 80 million shares, equivalent to a 23.4% stake.
Ferronoux said its board also approved a private placement with unnamed investors involving the subscription to 300 million common shares, with the final terms and conditions, and the price yet to be determined.
The company said the private placement will help it comply with the PSE’s minimum public ownership requirement following the property-for-share swap and Themis deals.
Meanwhile, Ferronoux said its board approved the increase in its authorized capital stock to P2.5 billion, divided into 2.5 billion common shares at a par value of P1, from the previous P550 million, divided into 550 million common shares at a par value of P1.
The company also announced that Alfred S. Jacinto has resigned as independent director to be replaced by Omar C. Taccad, while Irving C. Cosiquien stepped down as director to be succeeded by Rex Peter G. Raz.
Manuel Z. Gonzalez also vacated his role as corporate secretary to be replaced by Phil Ivan A. Chan, while Gwyneth S. Ong resigned as assistant corporate secretary.
Sought for comment, Chinabank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message that the move is advantageous for Ferronoux.
“This is a transformative and advantageous deal for Ferronoux as it will gain ownership of parcels of land worth far more than the swap price,” Mr. Colet said.
“The stock price is expected to move higher as the market gets a better handle on the fair value and development potential of the land. There is also a possibility that Eagle 1 will eventually infuse its much larger properties that are currently leased to Okada Manila,” he added.