TKC Metals Corp. will be issuing up to P1.5 billion worth of shares after it secures approval to increase its authorized capital stock.
In a disclosure to the stock exchange on Thursday, TKC said it will issue 750 million shares at P2 each. The shares will be taken from the increase in its authorized capital stock to three billion shares with a par value of P1 each, from its current capital stock of P1 billion.
“The proceeds from the increase in authorized capital stock shall put the corporation in a better position to pursue its operations, plans, and projects,” the company said.
The increase in authorized capital stock, which will be reflected in its articles of incorporation, was approved by the company’s shareholders in October 2018. The amendment is now pending with the Securities and Exchange Commission.
Trading of shares in TKC were suspended for an hour from 9-10 a.m. on Thursday, to give investors time to digest the material information. Shares in the company then soared 50% or 45 centavos to P1.35 each by the market’s close on Thursday.
The listed steel manufacturer earlier said that it will undertake an equity restructuring program to bring its stockholders’ equity back to positive territory.
This came after the Philippine Stock Exchange required the firm to submit a detail plan to prevent it from getting delisted, after the company registered a negative equity of P170.3 million, negative P898.72 million, and negative P574.9 million by end-2016, end-2017, and end-March 2018, respectively.
Firms with negative equity for three consecutive years must be delisted, according to the listing and disclosure rules of the PSE.
TKC manufactures and distributes steel products through its subsidiaries Treasure Steelworks Corp. and Zhangzhou Stronghold Steel Works Co. Ltd. The firm attributed its dismal financial performance to the drop in steel prices since 2014, which also forced it to reduce operations.
The company registered a net loss attributable to the parent worth P33.71 million in the three months ending March, amid gross revenues of P146.31 million. — Arra B. Francia
