JG Summit Holdings Inc., the investment holding company of the Gokongwei Group, has approved a capital infusion of up to P17.1 billion into its wholly-owned subsidiary, JG Summit Olefins Corp, to provide the necessary funding to help the petrochemical unit pay off maturing debts.
JG Summit will subscribe to additional shares in JGSOC, which will be issued through a combination of an increase in the subsidiary’s capital stock and the use of existing unissued shares. This transaction will further solidify JG Summit’s financial support for JGSOC, ensuring the subsidiary has sufficient liquidity to manage its obligations and maintain operational stability.
JGSOC is a key player in the petrochemical industry, engaged in the operation of a naphtha cracker plant and related facilities that produce a range of products, including polymer grade ethylene, polymer grade propylene, pyrolysis gasoline, and various by-products. These products are sold through various channels, including markets, trading, exportation, or contract sales. The company is also involved in managing and conserving the by-products generated by its plant, which plays a vital role in its broader industrial operations.
The capital infusion will be used to strengthen JGSOC’s financial standing, enabling it to meet its short-term obligations while continuing its ongoing operations.
The capital infusion is just half of the total 6.93 billion shares of JGSOC that will be subscribed to by JG Summit at a price of P4.95, an amount equivalent to the stocks’ book value.
The subscription will be made in two parts: one portion will be through the increase in JGSOC’s authorized capital, with 25 percent of the new capital to be subscribed. Of this amount, more than 25 percent will be paid by December 26. The remaining portion of the capital will be covered through the subscription to unissued shares, with payment for this portion also due on or before the same date.
