Steniel retests capital mart with P315-M offer

Paper company Steniel Manufacturing Corp. plans to raise up to P315.3 million via a follow-on offering, its first since nearly two decades of suspension and amid efforts to regain financial health.

Steniel disclosed to the stock exchange on Wednesday that it had submitted to the Securities and Exchange Commission its registration statement for the offer.

The company, whose trading resumed last April 30 after 17 years, plans to offer up to 157.65 million common shares for as much as P2 each.

Steniel has yet to disclose further details, including the use of proceeds and offer period.

Trading of Steniel’s shares was suspended in 2006 after it had defaulted on a P636-million term loan agreement with several banks due to “working capital drain,” as it had also been repaying past debts. The loan balances were sold to third party entities.

By July that year, Steniel’s shareholders approved the filing of borrower-initiated petitions for corporate rehabilitation.

A company or debtor—in this case, Steniel—typically files for corporate rehabilitation in court to help restore it to a “position of successful operation and solvency.” This is granted when the court finds that it is economically feasible for the company to continue operations.

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While Steniel appealed to the Philippine Stock Exchange in 2017 to lift the trading suspension after its petitions were dismissed by different courts, the bourse 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.

The sold loans were also restructured, and the outstanding principal and accrued interest were reduced through the turnover of Steniel’s idle machineries and spare parts.