Embattled agricultural products distributor Calata Corp. is once again in a bind after listed seafood and aquaculture firm Millennium Global Holdings Inc. (MGHI) said it would no longer proceed with its plan to acquire 81 percent of the company.
In a disclosure, MGHI said it had “decided with finality that the company will no longer proceed with its planned acquisition of 81 percent of listed company Calata.”
The Philippine Stock Exchange (PSE) has ordered the involuntary delisting of Calata back in July for violating multiple disclosure rules.
To avoid the delisting, Calata announced the following month that MGHI would secure majority of its stake through the purchase of new shares at a par value of P1 a share.
Under MGHI, Calata would then be used as a backdoor listing vehicle for subsidiary Millenium Ocean Star Corp. In turn, Calata’s operations would be transferred to a private subsidiary, Agriphil Corp.
PSE president Ramon Monzon had said, however, the proposal between the two companies was “not workable” noting minority shareholders already owned more than two-thirds of Calata shares. For the agribusiness company to transfer its shares to Agriphil, it would need a 67-percent vote.
Doubting that the small company owners would allow for a dilution of their shares if absorbed by Millennium, Monzon said Calata should instead provide an exit option.
In scrapping the deal with Calata, MGHI added: “The company shall instead tap its other business opportunities and areas of growth to fortify its business within the country and abroad.”
An official from MGHI said there would be no further statement from their end.
The local bourse is expected to come up with a final decision on Calata’s delisting this week.
Joseph Calata, CAL’s president and founder, was the youngest businessman ever to list his company on the local bourse. He cannot be reached for comment.