Premiere Horizon Enters Into P2.5B Equity Financing Agreement with LDA Capital
The Board of Directors of Premiere Horizon Alliance Corp. (PSE: PHA) has approved a Put Option Agreement (POA) with LDA Capital Ltd, a global investment group, to provide PHA with up to PhP2.5 billion in committed equity capital over the next 36 months.
In addition, the Board also approved the grant of a call option to LDA, which shall allow the LDA to purchase up to 133 million (133,000,000) common shares of Premiere Horizon at an exercise price of PhP2.26 per share, a 133% premium on the average volume weighted average price (VWAP) in the last one and half months, exercisable any time during the term of the agreement.
Under the agreement, Premiere Horizon will be able to access the equity financing by exercising Put Options. PHA has the right, but not the obligation, to draw down from this equity commitment with the first Put Option Notice (PON) to be done within 45 days. The number of shares PHA will issue on the Put Option will be based on the average shares traded volume every 15 trading days prior to the issuance of a PON. The issue price of the Put Option will be 90% of the average VWAP of the shares in the thirty trading days after the exercise of the Put Option. Transactions made under this agreement shall be subject to disclosure requirements of the Philippine Stock Exchange (PSE).
The total potential equity value is PhP2.8 billion for both the Put Options and Call Options. The number of shares will depend on the prices during the pricing period since these will be spread over a period of three years and subject to different pricing. But the total LDA subscription will not be more than 19.9% of issued and outstanding shares.
PHA has also agreed to pay a commitment fee of 2% of the total committed equity capital which is payable in installments. Fifty percent of which is due and payable from the proceeds of the first put option notice of the Company. The remaining will be due on the 12th and 18th month or earlier.
The funds to be generated from this agreement are expected to fund the working capital requirement of the parent company and finance the different projects of its subsidiaries including the real estate projects of West Palawan Premiere and Goshen Land Capital. The capital raised will be utilized to fund other expansion projects in natural and georesources development and in fintech such as SquidPay Technology, which is expected to be folded-in to PHA this third quarter of 2021.