Fatima Reyes, corporate secretary and information officer of the former BW Resources Corp., told the Philippine Stock Exchange that it has indefinitely postponed the scheduled stockholders meeting set yesterday to enable Fairmont to "review its business directions for the ensuing year and assess the merits of its proposed projects requiring stockholders action."
In particular, Reyes said the company’s board of directors will decide if they would push through with a one-billion rights issue initially considered last June.
Fairmont plans to use the proceeds of the stock rights offering to finance its initial venture into the mass housing business.
But the depressed state of the real estate and housing industry, along with the slump in the stock market have caused a double whammy to Fairmont’s plans, forcing the Megaworld-controlled company to defer its stockholders meeting until the company’s board decides on what business direction to pursue.
Early this year, Megaworld Corp. took control of Fairmont’s management and effected a top-level reorganization that has even attracted new foreign investors to its fold.
Emerging Market Assets (EMA) Ltd., a global investment company based in Hong Kong, has subscribed to an additional 350 million common shares to be issued by Fairmont by way of a private placement at an agreed price of P1 per share.
The additional share issuance has increased Fairmont’s total outstanding shares to two billion. Among its major stockholders are upscale property developer Megaworld (71 percent) and controversial businessman Dante Tan (12 percent).
With EMA taking up 17.5 percent of outstanding shares, it joins other major foreign groups in Fairmont notably the Savoy Group of New Zealand and Macau gaming king Stanley Ho.
The overhaul was seen as a strategic move by Megaworld to take control and realign the operations of a company that was the central in a high-profile stock scandal in 1999, involving Tan, the owner of the online bingo franchise, and other close associates of then President Estrada.