Metro Pacific Investments Corp. (MPIC) finalized the acquisition of a 34.76-percent stake in coconut products maker Axelum Resources Corp. (ARC) after several months of delay.
Under the agreement, MPIC’s wholly-owned agribusiness firm Metro Pacific Agro Ventures, Inc. (MPAV) will subscribe to 1.19 billion common shares and 200 million redeemable preferred shares in ARC for P5.32 billion.
The company said that while they retained the major terms of the share purchase agreement, they amended the payment terms.
Under the amended agreement, MPIC will pay the total price on an installment basis, with the first tranche worth P3.37 billion to be settled on Dec. 22, 2023.
The additional payments will be made once ARC achieved certain EBITDA (earnings before interest, taxes, depreciation and amortization) milestones under the original share purchase agreement.
“We proudly welcome the investment of MPAV into Axelum. This partnership is built on a shared vision and profound commitment to spearhead initiatives that will modernize our local coconut industry. We aim to achieve this by leveraging our joint expertise, network and resources,” ARC chairman and chief executive Romeo Chan said in statement to the stock exchange.
ARC said it would aggressively pursue value-accretive opportunities both domestically and overseas, as it aims to maximize capabilities and competitiveness of Philippine coconuts in the global stage.
“Axelum’s expertise in the coconut industry, combined with MPAV’s ambition for Philippine agriculture, position us to make lasting contributions to the nation.
We look forward to promoting sustainability and competitiveness in the country’s agricultural sector,” MPIC chairman, president and chief executive Manuel Pangilinan said.
MPAV signed a strategic partnership with ARC in February as part of its move to venture into agriculture sector.
The deal, which was supposed to close in August, was deferred as ARC registered weak financial results amid the slowdown in the US market caused by prolonged high inflation and high-interest rate environment.
After achieving a record high net income in 2022, it posted net loss P428 million in the first nine months of 2023 after booking a one-time loss on inventory write-down amounting to P309.88 million.
ARC said, however, it expect overall business to improve in 2024 as demand started to pick up and new orders are coming in.
ARC is present in over 30 export markets, with an extensive coconut portfolio ranging from coconut milk and desiccated coconut, to coconut water and coconut cream. It is a top strategic supplier to Vita Coco, the world’s largest and most popular coconut water drink.