PHINMA Corp. said on Friday that a private equity fund and the Asian Development Bank (ADB) are investing P1.625 billion in its education subsidiary, giving the investors board representation in the unit.

In a disclosure to the stock exchange, the firm said its board authorized yesterday the signing of an investment agreement by and among its unit Phinma Education Holdings, Inc. (PEHI) and investors Kaizen Private Equity II Pte. Ltd. and the ADB.

After the board’s approval, the parties signed the agreement, under which the two are entitled to appoint two of PEHI’s 11 directors. The two subscribed for newly-issued shares representing a 20.28% stake in the education unit.

Upon closing of the transaction, which is expected on or before Sept. 30, 2019, subject to the fulfillment of certain closing conditions, Phinma will remain the majority shareholder of PEHI.

Phinma’s interest in PEHI after the entry of investors will be 68.6%.

“[Phinma] has waived its rights to subscribe for new shares in PEHI in favor of the investors,” the firm said.

On Friday, Phinma rose 2.38% to close at P9.03.

PEHI is the holding company for Phinma’s investments in educational institutions. It owns Araullo University, Cagayan de Oro College, University of Pangasinan, University of Iloilo, Southwestern University, and St. Jude College.

It has a 50% stake in Phinma Saytanar Education Ltd. in Myanmar and has signed a joint venture agreement with an Indonesian partner, PT Tripersada Global Manajemen, to form Ind-Phil Management Co.

As part of the conditions precedent of the transaction, Philippine Investment Management (PHINMA), Inc. will exchange its shares in Araullo University and Cagayan de Oro College for a 9.06% stake in PEHI. — Victor V. Saulon

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