MRC Allied [MRC 0.89, up 2.3%; 85% avgVol] [link] said that its board of directors approved on the sale of 333.3 million common shares at P1.00/share to an unnamed investor under a previously authorized private placement deal. MRC said the transaction is expected to be executed within 10 days from the board’s approval. Upon completion, the mystery investor will acquire a 28.14% stake in MRC, while the holding of principal shareholder Menlo Capital Corp. will be diluted to 11.59% from 16.13%. The private placement is expected to raise P333.33 million in total proceeds. Of that amount, P180 million will be spent to acquire ownership interest in renewable energy companies and/or assets, while P150 million will be used to settle “duly recorded advances”. The transaction forms part of MRC’s broader plan to raise up to P1 billion through private placements.
MB bottom-line: Not sure why this private placement didn’t trigger some disclosure rules that would require MRC to reveal the buyer’s identity. The size of the sale represents more than 28% of MRC’s post-transaction outstanding shares. All that aside, I think it’s interesting to see them basically do the “I don’t know, invest in some renewable energy companies or something” bit. Given the market, it’s a very reasonable thing to say (renewable energy companies are performing well, and the barrier to entry is low enough for MRC to plausibly get involved), but what’s lacking here is some kind of strategy. Would knowing the buyer’s identity help us fill in the blanks with an implied strategy, or is that just some red herring? MRC has been in this limbo world for a while now, throwing spaghetti against the wall to see what will stick. Will this latest fistful of slop stick? Let’s find out.
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