THE board of Gokongwei-led JG Summit Holdings, Inc. has approved a proposal to infuse up to P11 billion into its petrochemical subsidiary to boost the latter’s operations.
In a stock exchange disclosure on Monday, JG Summit said the infusion is primarily intended to pay off JG Summit Olefins Corp. (JGSOC) maturing obligations and to support its operations.
“JGSOC will use the funds to pay off its expansion project obligations and to support its operations during a period of declining market demand and rising input costs,” the holding firm said.
The board of directors gave the go-signal in a meeting on Nov. 17.
“The capital infusion will be subject to regulatory approvals, if any,” the company added.
According to JG Summit, the additional capital will come in cash infusion amounting to P11 billion in exchange for 1.67 billion JGSOC shares at P6.57 per share.
“JG Summit will subscribe to additional shares of JGSOC which will be issued out of existing unissued shares,” the company said.
“The additional capital infusion will improve the JGSOC’s financial liquidity position,” he added.
JGSOC, a wholly owned subsidiary of JG Summit, is engaged in the operation of a naphtha cracker plant and other related facilities for the production of polymer-grade ethylene, polymer-grade propylene, pyrolysis gasoline, mixed C4, pyrolysis fuel oil and other products and their byproducts.
The company claims to be the country’s first and only manufacturer of integrated polyethylene and polypropylene resin, which are plastic packaging used for various products.
JGSOC operates an integrated petrochemical facility in Batangas City that houses the naphtha cracker plant, the polymer plants, the aromatics extraction plant, and the butadiene extraction plant.
In the third quarter, JG Summit said its consolidated revenues improved 24% to P87.9 billion while core net income after taxes rose 7% to P5.5 billion.
Shares of JG Summit at the local bourse rose 30 centavos or 0.78% to P38.70 apiece on Monday. — Revin Mikhael D. Ochave