THE Regional Trial Court (RTC) in Pasig City has dismissed the complaint filed by the Singaporean shareholders of Alliance Select Foods International Inc., hoping to stop the company’s stock-rights offer (SRO).
Alliance Select said in its disclosure to the Philippine Stock Exchange that it received an order from the court dismissing the 34-page complaint filed by Hedy Yap Chua early this month for lack of jurisdiction over the case.
The local court earlier this month also denied the request of Chua to issue a temporary restraining order (TRO) to stop the officials of the company, headed by its chairman Jonathan Dee, from conducting SRO before its annual stockholders’ meeting.
Chua’s complaint asked for a TRO to compel the company to hold its annual stockholders’ meeting before the SRO, slated later this month.
She said Dee’s group violated basic stockholder rights by requiring shareholders to subscribe to a P1-billion capital-raising exercise before holding the company’s 2015 annual general meeting that they say should have been held on June 15. The said SRO exercise, however, will further dilute Chua’s holdings.
Chua’s group previously owned about 34 percent, but with the group of Strongoak Inc. infused some $12.9 million (about 563 million) last year, it diluted the Singaporean holdings to about 24 percent.
The SRO will further dilute their holdings to 12 percent if they decide not to infuse more cash through the stock rights offer.
Chua is also accusing the Dee group of misappropriating many of the company’s funds. The Dee group denied the accusations.
Chua previously expressed concerns about the timing and the propriety of the SRO, as the tuna-canning company has continued to struggle financially in the last two years.
The company controlled by the Dee family said it had a net loss of $2.15 million (about P96 million) from last year’s profits of $984,000.
Revenues fell by 7 percent to $39.61 million from last year’s $42.55 million, as its main tuna business revenue declined by 11 percent as a result of a decrease in volume of sales accompanied by a decline in selling price mainly due to sharp pricing and lower fish cost.
The company said in its previous disclosure to the PSE that its stock rights offer consists of up to 1 billion shares at an offer price of P1 apiece.
Each stockholder is entitled to subscribe to the (stock rights offer) based on their proportionate shareholding in the outstanding shares of the company, it said.
To accept more funds, the company is doubling its authorized capital stock to P3 billion from the current P1.5 billion.
According to the firm’s prospectus, proceeds will be used for the following: capital expenditures for the fourth quarter of the year of $5.5 million, $750,000 for new management information system installation, $13.93 million for working capital expenditures and $2 million for debt repayment immediately following the offering.