Agriculture supplies firm raising funds via IPO

Agricultural products distributor Calata Corp. is offering shares to the public through the Philippine Stock Exchange to fund its retail and distribution expansion.

The company wants to raise P270 million and will use the proceeds to open 100 new retail stores, said Zandro Zulueta of Absolute Traders and Consulting Services Inc., Calata Corp.’s advisor for its initial public offering (IPO).

Joseph H. Calata, Calata Corp.’s chairman and CEO, said in a briefing that the company grew its sales to P2 billion in 2011 from P200 million in 2002, but there is still much room for expansion.

“The 100 new stores we’re putting up will barely make a dent on the demand,” Calata said.

Earlier, Calata Corp. said in a statement that the PSE board approved Calata Corp.’s IPO up to 36.012 million primary shares at an offer price of up to P7.50 per share.

The PSE offering circular indicates that the pricing will be finalized on May 4, while the offer period is set from May 10 to 16.

All shares will be listed on the PSE on May 23, 10 percent of which will be owned by the public.

Based on the maximum offering price, it will have a market capitalization of up to P2.7 billion upon listing.

The expansion will allow the company to retail agricultural products directly to farmers and small dealers in the Philippines. With new stores, Calata Corp. said it can increase business coverage, establish more stable customer base, eliminate the need to engage in price wars to win sales from dealers and increase profit margins and cash flows, Calata said.

The company could also offer lower prices to farmers, thereby helping them generate savings, he said.

Calata Corp. is a combined distributor of agro-chemicals fertilizers, seeds, feeds and veterinary medicines from manufacturers and business partners like B-meg, which is owned by San Miguel Corp.