Monde Nissin sets equity restructuring

MONDE Nissin Corp. is set to implement an equity restructuring in order to “zero out” a deficit incurred in 2022.

The firm’s board of directors on Wednesday approved the offsetting against paid-in capital in excess of par value. As of Thursday, the amount of deficit to be eliminated was P7,153,900,753 based on parent audited financial statements.

“The equity restructuring is intended to zero out the deficit ... as reflected in the parent audited balance sheet as of December 31, 2022, and is subject to the approval of the Securities and Exchange Commission,” Monde Nissin said.

“It will not involve a change in the par value of Monde’s shares nor will it require an infusion of any additional paid-in capital; neither will the equity restructuring result in any change in the number of Monde’s issued, outstanding or listed shares,” the company added.

Monde Nissin Chief Financial Officer Jesse Teo said the equity restructuring would allow the company to pay dividends.

“We reported a net loss [in 2022] due to the one-off impairment [from intangible assets of Marlow Foods],” he said, adding that under Philippine corporate law, “you cannot dividend out if you are in a deficit position in the parent company.”

“Currently, we have around a P7.15-billion deficit because of the domino effect of the impairment,” he continued.

“That is why we got the board to approve an equity restructure ... and we will use additional paid-in capital or share premium which stands at P46.50 billion to fully offset the said deficit in earnings ... If fully approved by the SEC, this will lead us to be able to dividend out from retained earnings that will be incurred hereafter.”

Monde Nissin’s share price went down on Friday by P1.25 to P9.81.