PSE OK’s Calata IPO plan

Calata Corp., being pitched to investors as an “emerging leader in Philippine agricultural industry,” is all set to become the third company to debut on the local stock exchange this year.

The Philippine Stock Exchange board has approved Calata’s initial public offering of up to 36.012 million primary shares at an offer price of up to P7.50 per share, indicating an IPO size of up to P270 million.

Based on an offering circular posted by the PSE, the pricing will be finalized by May 4 while the offer period will be conducted from May 10 to 16.

All the shares of Calata will be listed on the PSE on May 23, about 10 percent of which will be owned by the public. Based on the maximum offering price, it can have a market capitalization of up to P2.7 billion upon listing.

Proceeds from this offering will be used by Calata for an expansion program that will allow it to retail agricultural products directly to end consumers, farmers and other small dealers in the Philippines.

The establishment of retail or distribution outlets shall be placed in strategic areas beyond the company’s existing distribution network.

Calata claims to be the 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 expanding 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.

Formerly known as Planters Choice Agro Products Inc., Calata was incorporated in 1999.