March 13, 2019
SEC-OGC OPINION NO. 15-19
RE: PRE-EMPTIVE RIGHT
Mr. Joseph Elton Salimbangon
President and CEO
Baystreet Development Corporation
31-A. Pres. Magsaysay St.,
Kasambangan, Cebu City
Dear Mr. Salimbangon :
This refers to your letter dated 19 February 2018 inquiring on how to maintain the proportionate interest of Baystreet Development Corporation (BDC) in Ron Daniell Construction Corporation (RDCC) in case the latter issues additional shares.
Background
You stated that a Sale and Purchase Agreement (SPA) between Rodolfo B. Tumbaga (the Seller) and BDC (the Buyer) was executed on 6 December 2017 for the ninety percent (90%) shares in RDCC which amounts to ninety-nine million pesos (PhP99,000,000.00). BDC has already paid a total of thirty-two million pesos (P32,000,000.00) to the Seller which is equivalent to 29.10% of the shares in RDCC.
You further disclosed that RDCC received a mandate from the Philippine Contractors Accreditation Board (PCAB) to increase its capitalization to one hundred eighty million pesos (P180,000,000.00) to maintain its Triple A Accreditation. RDCC plans to issue a new set of shares to increase its capitalization to meet the PCAB requirement.
You therefore would like to know:...
