Investment banker Roberto “Bobby” Ongpin is hoping that his corporate blitzkrieg in the past few days will win banks over to his side.
Bobby’s Alphaland Corp. was in danger of folding up after news of Ashmore Group’s decision to divest from the property company reached the local banking community last year. Alphaland lawyer Rodolfo Ma. Ponferrada, in a January 20, 2014 disclosure to the Securities and Exchange Commission, conceded that with Ashmore losing interest to fund Alphaland’s projects, “the company encountered difficulties in borrowing.”
“This is only to be expected since a bank cannot be faulted for not lending to an entity whose significant shareholders already wishes to divest,” Ponferrada, who is also Alphaland’s corporate information officer, said.
Alphaland’s finances have become precarious in the first week of January this week. “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],” the disclosure said.
Alphaland’s consolidated cash balance, prior to the takeover of the company by Bobby’s group, stood at P121.3 million as of December 27, 2013, compared with P298.1 million in total unreleased checks due for payment. “If all unreleased checks at that point were to be released, cash balance would have had a deficit of P176.8 million. Also, weekly cashflow projections showed that if scheduled disbursements were to be released, cash would run out by mid-January 2014,” the Alphaland disclosure said.
Bobby, thus, had to move quickly to save the company from collapse. He devised a property swap involving 68 hectares of land in Itogon, Benguet, which is very close to Baguio City, in exchange for new Alphaland shares to be issued to the registered landowners.
Alphaland, in additon, made a capital on major shareholders to finance the company’s immediate funding requirements for 2014.
The capital call enabled Bobbyand his associates to increase their combined stake, become the biggest shareholders of Alphaland and wrest ownership control of the property developer from London-based Ashmore Group.
“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. Even without Ashmore, the group led by Mr. Roberto V. Ongpin now firmly controls Alphaland,” the disclosure said. “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 fund its future projects.”
Bobby’s RVO Group now owns 50.57 percent of Alphaland’s outstanding shares with 13 board seats, while the Ashmore Group’s stake was diluted to 24.41 percent with two board seats, after it defaulted on the capital call.
The RVO Group prior to the capital call had only 21.73 percent of Alphaland’s outstanding shares, while Ashmore Group owned 69.37 percent.
Ongpin’s RVO Capital Ventures Corp. and Ashmore have been locked in a boardroom battle since early 2013, after Ashmore declared that it was no longer willing to fund Alphaland’s expansion.
“The board of Alphaland has simply come to the conclusion that Ashmore is more of a hindrance than a help in pursuing its various projects,” Alphaland said.
Alphaland said its board of directors on Jan. 2, 2014 approved a capital call for all shareholders, with a payment deadline of Jan. 15. Ashmore then sought the help of the Makati regional trial court to stop the capital call. The court rejected Ashmore’s request.
The falling-out between Bobby and Ashmore has worsened, following a “simulated” sale of shares of Alphaland that caused the suspension of trading of the company’s shares in the local stock market.
Alphaland said in a separate disclosure it might no longer be compliant to the 10-percent minimum public ownership ruling for listed companies after Ashmore Holdings (Singapore) Pte. Ltd. misrepresented the sale of 49.6 million shares to Credit Suisse (Singapore) Ltd.
Alphaland said it learned that the sale of over 49,608,000 Alphaland common shares by Ashmore to Credit Suisse in December 2012 was simulated, which means Ashmore Holdings continues to be the beneficial owner of the same shares and that Ashmore misrepresented the transaction.
“Ostensibly and for its own selfish purposes, Ashmore simulated the sale [and misrepresented the same to Alpha] in order to ensure that the property firm remains listed with the exchange,” Alphaland said.
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