SEC waives tender offer rule for Menlo Capital in MRC entry

The Securities Exchange Commission (SEC) has approved the request of investment house Menlo Capital Corp. to waive the tender offer rule in relation to its entry in listed MRC Allied Inc.

In a disclosure to the Philippine Stock Exchange yesterday, MRC Allied said the SEC’s Markets and Securities Regulation Department has informed them it has granted Menlo Capital’s request for exemptive relief from the mandatory tender offer rule.

This was in relation to the 4,387,658,975 common shares issued by MRC Allied to Menlo Capital pursuant to the deed of assignment with share subscription and conversion of debt-to-equity entered by both parties on July 19, 2013.

“We are pleased with the decision of SEC to grant exemptive relief application. It means we don’t have to do a tender offer. We can already proceed with the additional listing of the shares subject to this transaction,” MRC Allied president and CEO Gladys Nalda said.

The Securities Regulation Code requires mandatory tender offers when a person or group of persons intends to acquire 35 percent of the outstanding voting shares of a public company in one or more transactions within a period of 12 months.

These mandatory tender offer requirements are imposed to give the minority shareholders the opportunity to sell their shares at the same price as the majority shareholders in cases where there is a change in control of the company.

In 2013, MRC announced a debt-to-equity conversion of up to P1 billion worth of previously contracted debts, loans and other payables.

Menlo Capital took up as much as five billion common shares, giving it 60.35 percent control of MRC Allied from just 12.2 percent.

Menlo Capital, formerly Pacific Asia Capital Corp., is owned by the Bitanga and Osmeña families, with Lucio Tan Jr. holding a minority stake.

Originally a listed real estate company with a diverse portfolio in property and mining, MRC Allied announced in May 2017 that it is shifting its focus to pursue clean power investments under its new leadership.

The company has outlined a 1,000-megawatt capacity target by 2022 from clean energy developments.

Initially, it is developing a 100-MW solar farm in Clark Green City estimated to cost P5.5 billion and a 60-MW solar plant in Naga City, Cebu with a projected cost of P3.3 billion and is expandable by another 40 MW.

To fund the development of the projects, MRC Allied would conduct capital raising activities – at least P1 billion from private placement and issue at least P1 billion worth of preferred shares, Nalda said earlier.

Late last year, the company increased its aspirational target capacity from 1,000 MW by 2022 to 10,000 MW by 2027.