Alliance Select Foods International Inc. is set to receive a P660-million equity infusion from its parent company as it moves to clean up its accumulated deficit and overhaul its capital structure.
The company’s board approved the proposed transactions at a special meeting on Sept. 2, subject to stockholders’ and regulatory approvals.
Strongoak Inc., Alliance Select’s parent company, will subscribe to 6 billion common shares at P0.11 each, providing P660 million in fresh equity.
The subscription will follow a proposed reduction in the par value of Alliance Select shares to P0.10 from P0.50. The company’s authorized capital stock will initially fall to P300 million from P1.5 billion, while the number of authorized shares will remain at 3 billion.
The par value reduction is expected to generate about USD21.4 million in additional paid-in capital. Alliance Select plans to apply the resulting APIC against its accumulated deficit, subject to stockholders’ and regulatory approvals and applicable accounting requirements.
The company said the measures are intended to improve its capital structure and financial flexibility while creating additional capacity for future equity funding.
After the par value reduction, Alliance Select plans to increase its authorized capital stock back to P1.5 billion, but with the lower P0.10 par value. This would allow the company to have 15 billion authorized common shares.
The planned Strongoak subscription would bring Alliance Select’s issued and outstanding shares to about 8.5 billion, leaving roughly 6.5 billion authorized but unissued shares available for future issuance.
Alliance Select will also seek approval from the Philippine Stock Exchange and other regulators to list the 6 billion new shares to be issued to Strongoak.
The company will call a special stockholders’ meeting to secure approval for the proposed restructuring, amendments to its articles of incorporation, capital increase, and related transactions.
The moves give Alliance Select a two-part capital plan: use the par value reduction to address its accumulated deficit, then bring in fresh equity from its parent to strengthen its funding base.
