Listed seafood and aquaculture firm Millennium Global Holdings Inc. (MGHI) has signed a deal to acquire 81 percent of agricultural product distributor Calata Corp. (CAL), which will continue doing business as a privately-held entity.
CAL said in a statement that MGHI would secure the majority stake through the purchase of new shares to be issued following the increase in the company’s authorized capital stock.
MGHI will subscribe to up to 2.5 billion new shares at a par value of P1 a share, which will give it 81 percent of CAL.
The move comes after PSE earlier said that CAL had repeatedly violated disclosure rules and the so-called blackout rule.
PSE initiated the “involuntary delisting” procedure against CAL, but that the agriculture firm would be allowed to appeal and explain its side.
“It would appear that the company’s lack of experience in effectively complying with strict regulatory regulations might compromise public shareholders’ interest as a result of possible sanctions which may be imposed upon an erring listed entity,” said president and CEO Joseph H. Calata in a letter to shareholders.
“The Board of Directors decided that it would be in the best interest of the investing public to welcome new management which shall inject a new but related line of business into the company,” Calata added.
Under MGHI, led by its chair and president Michael Yang, CAL will be used as a backdoor listing vehicle for its subsidiary, Millennium Ocean Star Corp. (MOSC), an exporter and importer of seafood and aquaculture products with plants in the Philippines and Hong Kong.
In turn, operations of CAL will be transferred to a private subsidiary, Agriphil Corp.
CAL said in a disclosure that the entry of MGHI would be submitted for ratification during the company’s annual stockholders’ meeting in October.
CAL reported a net profit of P89.2 million for the first half of the year, an 11-percent decline from last year’s P99.9 million for the same period.