SGI corporate information officer Enrique Ligeralde said the company’s board of directors approved last week the rescission of the April 16, 2001 deed of assignment between it and Destiny Cable Inc. (DCI), a company also owned by the family of Joseph and Elena Lim.
"The Board took this action after extensive delays in the issuance of government approval to issue SGI shares to DCI in accordance with the Deed of Assignment," Ligeralde said.
The transaction would have involved the transfer of DCI’s investment in Destiny Inc. in exchange for the issuance of 673,844,980 SGI shares. When the share-swap was planned two years ago, the Lim family’s transfer of interest in the Destiny Group to SGI was valued at P2.415 billion for over one billion shares at a higher price of P2.30 each. SGI stocks closed at 37 centavos yesterday, unchanged from the previous trading.
Despite this action, Ligeralde said SGI fully intends to pursue the direction of acquiring Destiny Inc. and has maintained the rights of first refusal for acquiring ownership of the said firm.
"The Board fully intends to present the new plan to acquire Destiny Inc., under new terms and valuation deemed much more favorable to SGI stockholders, at a special stockholders meeting to be called for this purpose," he added.
With the planned acquisition, the Destiny Group will be restructured so that the broadband cable infrastructure assets will be owned by Destiny Inc. and the franchise to operate cable facilities will be retained by Destiny Cable. Destiny Inc, which will become a wholly-owned subsidiary of SGI, will thereafter lease its facilities to Destiny Cable.
SGI, in turn, will invest in bonds or warrants of the holding company, which will be convertible to 100 percent of the issued capital stock of Destiny Cable.
SGI, formerly known as United Paracale Mining Co., is primarily engaged in the manufacture, distribution, and export of consumer electronic products. It operates production facilities for the manufacture of TV, video, and audio under the Sony and Aiwa labels. But last year, its wholly-owned subsidiary Kita Corp., whose principal customer is Japan’s Aiwa Co. Ltd., suspended its manufacturing operations at the Clark economic zone due to lack of orders.
The Destiny Group, meanwhile, is engaged in the multimedia business. In June 1996, DCI obtained a 25-year franchise from the government to engage in cable TV, data and other businesses like high-speed Internet and leased line services, cable telephony, VSAT services, broadcast uplink and programming services.