Alliance Select doubling capital to 3 billion

Alliance Select Foods International Inc. has received majority sharehold- er approval for the doubling of its authorized capital stock to 3 billion despite opposition from its Singaporean shareholder.

“The Stockholders of the Company representing more than 2/3 of the outstanding capital stock approved the increase in the authorized capital stock of the Company,” the company said in a disclosure to the Philippine Stock Exchange.

This paves the way for a planned 1-for-1 stock rights offering at the par value of 1.00 per share. Funds the company will raise from subscription to the new shares have been earmarked for working capital requirements, and capital expenditures.

However, Singaporean director Hedy Chua, who holds a 24 percent interest in the company, said “it does not make sense” to subscribe to the new shares even though it means a dilution to 12 percent and losing her board seat.

Chua noted that her interest in the company was diluted from 34 percent when Alliance Select raised 563 million by selling shares to Strong Oak Inc. despite protests from the Singaporean shareholder.

“Where did the 563 million go? If you look at the financial statements, the debt level of the company is about the same,” Chua said noting the the firm had claimed that the money was for debt retirement and supplies.

“So, the 560 million did not improve the company’s financial condition. What was the entire transaction for? Now, they’re going to double their capital stock once again. They’re threatening to issue more shares and that would achieve another dilution,” said Chua.

She added that “I don’t know anyone in his right mind that would give money to this company that’s been declaring loss after loss. I mean, why would you invest?”

However, Alliance Select president Raymond See said “we’re continuing to address all the issues relative to enhancing Alliance’s capacities, efficiencies and profitability.”

“We will not let up. The ensuing capital we hope to raise from this exercise would prove invaluable to Alliance’s operations and growth. It will result in a company truly better poised for more active competition both here and abroad,” said See.