The Chemphil group has sold a controlling stake in subsidiary LMG Chemicals Corp., a shell company deemed suitable for backdoor listing, to a businessman involved in industrial auctions.
In a disclosure to the Philippine Stock Exchange on Monday, LMG said its principal shareholder Chemical Industries of the Philippines Inc. (Chemphil) has signed a deal to sell a 65.92-percent stake in LMG to United Auctioneers Inc. founder and chief executive Dominic Sytin and ex-banker Robinson Siao for P405 million.
The closing and completion of the sale would still be subject to certain conditions in accordance with the requirements of the Securities Regulation Code, including a tender offer from Sytin and Siao.
United Auctioneers is an industrial auction company operating in Subic Bay and with offices in Davao. The firm oversees a marketplace for industrial machines, trucks and other miscellaneous equipment from Japan, the United States, Europe and other Asian countries.
Based on its website, United Auctioneers plans to expand operations throughout the Asia Pacific region in the next ten years.
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The Sytin family is also involved in automotive assembly and distribution business using the Chinese brand Foton. Last year, a P1.2-billion Foton assembly plant was inaugurated in Clark. Dominic Sytin chairs Foton Philippines.
The family is also into mobile distribution, having introduced to local consumers the “Happy Mobile” brand as a low-cost smart phone alternative, industry sources said.
Shares of LMG fell by 9.18 percent to close at P4.65 each, giving the company a market capitalization of P990.95 million.
LMG was previously an industrial chemicals manufacturer and distributor. In 2007, LMG transferred its acid plant and tank farm properties to wholly owned subsidiaries, Chemphil Manufacturing Corp. and LMG Land Development Corp. “for better management and monitoring.” Starting 2009, upon the divestment of the subsidiaries, the company’s operations shifted to trading.
The company has divested more assets over the years. As a result, LMG is now only engaged in the trading of chemical products such as caustic soda, sulfur and other industrial chemicals.