PSE OKs Steniel P315-M follow-on offer
Paper company Steniel Manufacturing Corp. will raise up to P315.3 million via a follow-on offering in November to expand its warehouse in Davao del Norte.
This is one of Steniel’s first major projects since resuming trading at the local bourse.
Steniel on Friday disclosed that the Philippine Stock Exchange (PSE) had approved its application to offer up to 157.65 million common shares at up to P2 each.
The final price will be set on Oct. 24. The offer period is set on Nov. 3 to Nov. 7.
The shares will be listed on the main board of the PSE on Nov. 17, Steniel said in its disclosure.
Based on its latest preliminary prospectus, Steniel will use part of the proceeds from the offer to expand its paper warehouse in Panabo, Davao del Norte. The project is tagged at P250 million.
Spanning 1.9 hectares, the expansion project will add new logistics and production capacities to the warehouse.
At the same time, Steniel will use part of the proceeds to fund its working capital requirements.
“Note that the company’s operations are working capital-intensive, as [Steniel] must maintain a sufficient buffer stock of raw materials to ensure continuous production,” Steniel said in its prospectus.
The company first announced the follow-on offering last February. That was nearly a year since it resumed trading on the PSE.
To recall, trading of Steniel shares was suspended in 2006 after it defaulted on a P636-million term loan agreement with several banks.
This was due to “working capital drain,” as Stenial had also been repaying past debts. The loan balances were later sold to third-party entities.
By July 2006, Steniel’s shareholders approved the filing of borrower-initiated petitions for corporate rehabilitation.
A company or debtor—in this case, Steniel—files for corporate rehabilitation in court to help restore it to a “position of successful operation and solvency.”
This is granted when a court finds that it is economically feasible for such a company to continue operations.
Steniel appealed to the PSE in 2017 to lift the trading suspension after its petitions were dismissed by different courts. But the PSE pointed out that the company’s stockholders’ equity had been negative since 2008.
Steniel addressed this via share swap and purchase deals with its creditors.
