PREMIERE Horizon Alliance Corp.’s (PHA) board of directors inked a put option agreement with global investment firm LDA Capital Ltd., the listed company said in a disclosure on Wednesday.
“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,” Premiere Horizon said.
“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,” it added.
LDA Capital will provide the company as much as P2.5 billion in equity capital within the next 36 months. A call option is also granted to LDA Capital.
The firm may buy up to 133 million common shares of Premiere Horizon any time during the term of the agreement for an exercise price of P2.26 apiece, which is said to be a 133% premium on the average volume weighted average price (VWAP) in the past month and a half.
Meanwhile, Premiere Horizon can 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,” Premiere Horizon said.
The number of shares to be issued will be based on the average volume of shares traded 15 days before Premiere Horizon issues every PON. Its issue price will be 90% of the average VWAP of the shares 30 days following the put option exercise.
The company said the potential value for both put options and call options stand at P2.8 billion.
“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,” the company explained.
Premiere Horizon will pay a commitment fee worth two percent of the committed equity capital, half of which will be settled via proceeds of its first PON.
The balance will be paid on the 12th month and the 18th month. Premiere Horizon may also settle the remaining amount earlier.
Premiere Horizon will be disclosing all put option agreement transactions via the exchange. It assured that LDA Capital’s subscription to the company will not go beyond 19.9% of its issued and outstanding shares.
Shares of Premiere Horizon at the stock exchange declined by 5.52% or eight centavos on Wednesday, closing at P1.37 each. — Keren Concepcion G. Valmonte