Philippine information technology firm DFNN Inc says it will convert up to PHP600-million (US$10.0-million) of “existing liabilities owed to various creditors” into up to 500 million common shares and 100 million preferred shares.
The moves were approved by the group on March 5. The company confirmed in a Friday filing to the Philippine Stock Exchange that the debt-to-equity conversion will be used to “retire existing debts” of DFNN.
The common shares will be issued out of the planned increase in the group’s authorised capital stock, to PHP2.00 billion. The 100 million preferred shares will be issued out of the corporation’s existing unissued capital stock.
The common and preferred shares will be issued at a price of PHP1.00 per share.
DFNN stated in the filing that its board had “delegated” to the group’s management “the authority… to determine the final list of participating creditors and the specific allocation of both the common and preferred shares”.
The filing added that the list of participating creditors is “currently being finalised by management”.
The firm added: “This will significantly improve the corporation’s balance sheet, strengthen its financial position, and eliminate continuing interest and penalty obligations associated with the outstanding liabilities.”
The transaction is subject to the approval of the Philippine Securities and Exchange Commission for the increase in authorised capital stock and the valuation of the non-cash consideration.
Stock Exchange approval is required for the additional listing of the newly-issued common shares and preferred shares.
Via subsidiaries, DFNN has licences for electronic gaming machines, a sports betting exchange, and digit and pari-mutuel games, with the nation’s gaming regulator, the Philippine Amusement and Gaming Corp (Pagcor).
In December, DFNN’s board had approved an increase in the company’s authorised capital to PHP2.00 billion from the previous figure of PHP500 million.
