Millennium Global buys majority stake in Calata

AGRIBUSINESS firm Calata Corp. said it will be welcoming new management that will oversee the company’s operations, amid steps taken by the local bourse to delist the firm following several violations of disclosure rules.

In a disclosure to the stock exchange on Thursday, Calata said Millennium Global Holdings, Inc. will be purchasing a total of 2.5 billion shares from the firm, effectively giving MGHI an 81% stake in Calata. This will be taken from the increase in authorized capital stock by up to 10 billion common shares with a par value of P1 apiece.

“Because it would appear that the company’s lack of experience in effectively complying with strict regulatory regulations might compromise public shareholders’ interest as a result of possible sanctions which may be imposed upon an erring listed entity, on Aug. 17, 2017, the board of directors decided that it would be in the best interest of the investing public to welcome new management which shall inject a new but related line of business into the Company,” Calata Chairman Joseph H. Calata said in a statement yesterday.

Last July, the Philippine Stock Exchange initiated involuntary delisting proceedings for Calata after the firm committed 29 violations of Section 13.1 of the PSE Disclosure Rules from Nov. 29, 2016 to June 20. It also incurred 26 violations of Section 13.2 of the same rules from Oct. 6, 2016 to March 16 and from April 26 to May 2.

The violations were related to the timely disclosure of the disposition of shares by a company’s directors and principal officers and disclosure of updates of previous disclosures on material information that may affect investor decision.

Calata was also found to have violated the so- called blackout rule which prohibits directors and principal officers who have obtained material non- public information to trade their company’s shares within a prescribed period.

Following the acquisition, Calata said it will be transferring all its assets and liabilities to Agriphil Corp. and/or a private firm.

“The transaction intends to transfer the existing agribusiness of Calata Corporation to Agriphil Corporation, a private entity or such other private entity,” the company said.

The board will also wait for shareholder approval in order to make amendments to the company’s articles of incorporation, which will see a change of name, primary purpose, principal place of office, as well as the capital stock increase.

In a separate disclosure, MGHI noted that after the acquisition, it will be using Calata to purchase the business of its subsidiary, Millennium Ocean Star Corp. (MOSC). Established in 1981, MOSC is an exporter and importer of seafood and aquaculture products in both the local and international market. The company began as an exporter of squid balls to Hong Kong until it eventually expanded to create a major plant in Cebu City.

MOSC now exports an average of 3,000 metric tons of various seafood items every year, which includes squid, cuttlefish, octopus, and coral reef fishes. The company further imports around 2000 metric tons of several seafood products per month for local distribution.

To date, MOSC has 11 plants in Luzon, seven in Visayas, three in Mindanao, and one in Hong Kong alongside several buying stations and processing and storage facilities in different parts of Metro Manila. For further growth, the company said it is currently fast tracking its expansion in Vietnam.

MGHI shares went up by 17.15% to 28 centavos each yesterday.