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Friday, March 29, 2024

Millennium Global buying 81% of Calata Corp.

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Agriculture company Calata Corp. on Thursday unveiled a plan to spin off its assets to privately held Agriphil Corp. and sell an 81-percent interest to Millennium Global Holdings Inc., a listed firm formerly known as IPVG Corp.

Calata president Joseph Calata said in a message to shareholders its board of directors approved the two transactions in bid to protect the welfare of minority shareholders after the Philippine Stock Exchange initiated delisting procedures against the company because of multiple disclosure violations.

Calata said the company, as a neophyte member of the PSE, struggled to comply with all the rigorous regulatory requirements of the corporate regulator.

Calata and MGHI did not disclose the value of the transaction.  MGHI, led by chairman, president and chief executive Yang Chi Jen (Michael Yang), recently diversified into the food sector with the acquisition of Millennium Ocean Star Corp. and Cebu Canning Corp.

MGHI said its board approved the increase in the authorized capital stock of the company from P250 million to P10 billion and the acquisition of 81 percent of Calata by subscribing 2.5 billion shares from Calata’s increase in authorized capital stock.

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Calata said “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 said.

MGHI said in a disclosure to the stock exchange it would use Calata to acquire the business of subsidiary Millennium Ocean Star Corp., a leading exporter and importer of seafood and aquaculture products in the local and international market. 

Trading of MGHI shares were suspended for one hour from 1:30 p.m. to 2:30 p.m. Thursday to give shareholders time to digest the disclosure. Upon resumption of trading, share price of MGHI surged 17.1 percent to P0.280.

The PSE on July 22 initiated delisting procedures against Calata for allegedly committing multiple violations of the disclosure rules of the exchange.

The local bourse said Calata committed 29 violations of Section 13.1 of the its disclosure rules from Nov. 29, 2016 to June 20, 2017.

Section 13.1 of PSE disclosure rules provide that a listed firm should file with exchange within a period of five years any direct and indirect ownership change of its directors and principal officers.

Trading of Calata stock is currently suspended.

“The management of Calata Corp. has always maintained that it has the ultimate responsibility over the welfare of its public shareholders. With the entry of MGHI and MOSC’s business, it is ensured that the public shareholders’ interest and value shall continually be protected and enhanced,” Calata said.

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