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A. BROWN Co. Inc. (ABCI) plans to swap its assets for additional
shares in its subsidiaries to raise funds for its participation in
the consortium that won the bid for the National Transmission Corp.
In a disclosure to the Philippine Stock
Exchange, ABCI said its board has approved the reorganization of the
company and the transfer of its “real estate, non-hard and trading
assets” to its wholly owned units Brown Resources Corp. and A
Brown Energy and Resources Development Inc. in exchange for more
shares in these companies.
“The reorganization is intended to give ABCI
more flexibility in raising funding for its participation in the
Monte Oro Resources and Energy Inc.,” Jasmin Castro, ABCI
assistant treasurer, said.
ABCI, which is primarily engaged in real estate
development, has interests in power, property development and
investments in other companies.
The company’s reorganization will be
implemented after the required consent of bank creditors and
identification of specific assets that will be transferred to
specific subsidiaries. ABCI will also consider the ruling of the
Bureau of Internal Revenue on the treatment of taxes in
asset-for-share swap.
ABCI has an 18.74-percent interest in Monte Oro
Resources, which owns Monte Oro Grid Resources Corp. that, in turn,
owns 30 percent of the National Grid Corporation of the Philippines,
the concession company of the consortium that won the bid for
TransCo in December last year.
The other members of the consortium are the
Calaca High Power Corp. and State Grid Hong Kong Ltd., a wholly
owned subsidiary of State Grid Corp. of China.
The group submitted the highest bid of $3.95
billion for the right to operate and maintain TransCo’s nationwide
power transmission system for the next 25 years, besting the group
of San Miguel Energy Corp., Dutch firm TPG Aurora BV and
Malaysia’s TNB Prai Sdn Bhd.
The TransCo auction was considered one of the
biggest and most successful auctions of government prime power
assets under the state program to privatize and restructure the
power sector.
ABCI’s shares closed flat Monday at P3.
-- Euan Paulo C. Añonuevo
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