• The Financial District

AXELUM PIVOTS TO DEBT PAYMENT

Listed coconut manufacturer Axelum Resources Corp is pivoting from its planned strategic acquisition of companies to paying off debts with the economic  decline from the Covid 19 pandemic.


In a disclosure to the Philippine Stock Exchange (PSE) today, Axelum said that its board approved the reallocation of the proceeds from its initial public offering (IPO) where it raised P4 billion from its listing in October last year.

Usually, a company doing an IPO has to state in its prospectus the manner by which the proceeds from its listing would be used. This forms the basis for an investor to make his decision on whether to buy into the IPO or not.

Any change from the original plan has to be reported to the PSE as a material fact that could affect its stock price and is part of the transparency protocol related to shares of stock listed on the exchange.

The company said that its board of directors  approved the reallocation of the total amount of Php1 Billion from the use of proceeds raised from its IPO, composed of the following amounts:

1) Php820 Million intended to fund strategic acquisitions from 2020-2022; and

2) Php180 Million intended to fund the expansion of domestic and international distribution networks from 2020-2021, to be used instead to prepay loans of the Corporation to save on interest expense.

Its board said it decided on the above-mentioned reallocation due to the effect of the COVID-19 pandemic on the global economy, which makes it untimely and risky to pursue the original intended use of proceeds consisting of strategic acquisitions and expansion of international marketing networks in the next few years.

However, the board said it is still seriously pursuing opportunistic acquisitions that may be available because of the COVID-19 pandemic and is confident that, after retiring the current debt, the Corporation's bankers will be more accommodating to finance any acquisition opportunity when it arises

In the prospectus in its IPO , the company had more than P2 billion in debt.

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