NOW Corp. said it has erased its deficit of P402 million after it received approval from the Securities and Exchange Commission (SEC) to undergo equity restructuring.

In a series of disclosures to the stock exchange Friday, the Velarde-led firm said the corporate regulator has given the go-ahead to decrease its authorized capital stock and par value per share through the reduction of its surplus of P455 million.

The par value of the company’s common shares has been reduced to 70 centavos from P1 previously, decreasing its authorized capital stock to P1.44 billion from P2.12 billion, which will be divided into 2.06 billion common shares.

“The company’s equity restructuring will enable it to eliminate accumulated deficit, strengthen its financial position and to allow it to declare dividends to shareholders from its unrestricted retained earnings that will be generated subsequent to the equity restructuring,” it said.

Aside from the wiping out of its P402-million deficit, Now Corp. also has a pending application with the SEC to convert the outstanding advances of its shareholders amounting P264 million into equity.

“…the conversion of advances to equity, once approved, will improve the Company’s debt-to-equity ratio from 0.70:1 to 0.37:1. Post debt-to-equity, equity will account for 73% of total assets as compared to 59% prior to equity conversion,” it said in a statement.

These efforts are meant to help the company raise funds for its capital expenditures as it expands its fixed wireless broadband business. Now Corp. said it needs a strong balance sheet to support its core business in the near term.

“Foundations for organic and fundamental growth are now being put in place in order for Now to excel in the industry as the fixed wireless internet provider of choice,” Now Corp. Chief Operating Officer Rodolfo P. Pantoja was quoted as saying.

“We are banking on these changes as we strengthen further our financial health as we institute and excel in service excellence to our clients.”

The company is planning to extend the reach of its broadband business beyond Metro Manila as it said there is a growing demand for its services in “underserved or unserved areas.”

“Wireless solution is superior to fiber cable-based infrastructure in terms of ease, time and cost to deploy. And continuing advances in the field of wireless technology allows the company to offer world class broadband service that match the quality of its fiber based competitors,” it said. — Denise A. Valdez

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