MANILA, Philippines—Calata Corp., a leading distributor of agricultural products in the country, is planning to debut on the Philippine Stock Exchange (PSE) this year through a P540-million share offering to the public.
In a prospectus submitted by the company’s chair, Joseph Calata, to the Securities and Exchange Commission dated February 22, Calata seeks to offer to the public 72.024 million shares evenly split between primary and secondary shares at an offer price of up to P7.50 per share.
This exercise will put in public hands about 20 percent of the company’s total stock after the initial public offering. Local investment house Unicapital Inc. was mandated as issue manager and issue underwriter.
Given that half of the offer shares or about 36 million shares will consist of primary shares, the exercise is expected to generate gross proceeds of P270 million, the bulk of which Calata plans to use for a nationwide expansion program to retail agricultural products directly to end-consumers, farmers and other small dealers in the Philippines.
Of the proceeds, P132.89 million will be used to establish new outlets at an estimated cost of P1.33 million per outlet. P109.52 million will be used to boost working capital.
Calata claims to be largest combined distributor of agro-chemicals, feeds, fertilizers, veterinary medicines and agricultural products coming from manufacturers or business partners such as San Miguel Corp. for B-Meg Feeds. It also distributes veterinary products Syngenta, Bayer, Jardine, Dupont, Sinochem. For agrochemicals, it carries East West Seeds, Monsanto and Planters Products as well as Swire and Viking for fertilizers.
By scaling up its operations, Calata expects to increase business coverage, establish a more stable customer base, eliminate the need to engage in “price war” to win sales from dealers, increase profit margins and increase cash flows because more sales will henceforth be on “cash on delivery” instead credit terms. The company also said it could offer lower prices to farmers, thereby helping them generate savings.
Calata said it won’t use any proceeds to discharge any debt nor reimburse officers, directors, employees or shareholders. The company has seven directors including its chair. The other board members are Benison Paul de Torres, Jaime Laya, Baltazar Endriga, George Nava, Jose Zalde and Harvey Keh.
According to the prospectus, among the company’s strengths are its comprehensive range of products, aggressive distribution strategies, efficient sales and logistics system, attractive growth prospects and strong market position. The company has reported an increase in annual revenues by 800 percent in a period of seven years from 2003 to 2010.
Formerly known as Planters Choice Agro Products Inc., Calata was incorporated in 1999. It reported a net profit of P100.17 million in 2011, tripling the P33.84 million level a year ago while sales turnover surged to P2 billion from P1.8 billion over the same comparative period.
The company ended 2011 with P1.05 billion in assets, up from P661 million in resources a year ago.