Caught in a clash against its former foreign partner Ashmore Group, the Ongpin-led firm Alphaland Corp. needed to decide what form of fund raising it will do since no bank would be willing to risk funding a conflict-ridden company.
For misrepresenting a supposed P942-million deal involving the sale of 2.5 percent of Alphaland stocks in 2012, the management of the property firm filed a criminal complaint against two executives of British fund Ashmore Group for allegedly violating the Securities Regulation Code.
On January 2, 2013, Ashmore group sent Alphaland a disclosure declaring that an Ashmore unit based in Singapore sold 49.6 million Alphaland shares to another Singaporean company owned by investment firm Credit Suisse. The sale was for P19 per share.
As a result of the sale, Alphaland was able to comply with the 10-percent minimum public float requirement of the Philippine Stock Exchange (PSE) and the Securities and Exchange Commission.
Recently, Ashmore senior management found out that the said sale of 2.50 percent of Alphaland shares was simulated as then and now, Ashmore continues to own the block.
“When the news of Ashmore’s decision to divest from Alphaland and to discontinue funding Alphaland’s projects reached the local banking community, the company encountered difficulties in borrowing,” Alphaland told the local bourse.
“This is only to be expected since a bank cannot be faulted for not lending to an entity whose significant shareholder already wishes to divest. At that time, the combined shareholdings of Mr. Roberto V. Ongpin and Ashmore controlled Alphaland,” it added.
Thus the Alphaland board approved the company’s plan to hold a stock rights offering to minority stockholders at P2.50 per share, of which each share is entitled to 0.64 new share in the company. The number of shares to be offered is 108.3 million. The offer period has yet to be announced.
“In view of the company’s inability to borrow from the local banking community, in a few weeks’ time the company will be unable to pay its suppliers, creditors and even its employees. Thus, the company will become insolvent and its shares will be worth zero, or close to zero,” Alphaland further said in its most recent filing with the exchange.
The company even reiterated that the group led by Ongpin now firmly controls Alphaland.
“In any event, after the property swap and the capital call were implemented on January 20th, there is no longer any uncertainty on the controlling shareholder of Alphaland. With the certainty in the majority ownership of the company, Alphaland management is confident that it will now be able to line up the cash required to complete Alphaland’s existing projects as well as to fund its future projects,” the company further said.
For 2013, Alphaland said it made record profits of P6.5 billion compared to the P2.02 billion it recorded in 2012.
Currently, Alphaland could not trade its shares at the PSE after the bourse imposed a trading suspension on them, citing public float requirement issues.