Agribusiness company fails to close deal within deadline

CEBU, Philippines - Agribusiness firm Calata Corp. and its foreign partners are now seeking another group of investors to commit to the $1.4-billion Mactan Leisure City after they failed to close a deal within the deadline they had set.

In a disclosure to the Philippine Stock Exchange, Calata's hired management consulting firm RiskWise Global Capital Group said: "We have been working with a particular group of foreign investors for the past twelve months to close this deal. However, due to their perceived political risks and other issues in the country, they have decided to retract their commitment to proceed."

RiskWise added these underlying issues were beyond the control or influence of Calata and its foreign partners Sino-America Gaming Investment Group LLC (Sino) and Macau Resources Group Ltd (MRG).

"We would like to report however that we are now working diligently to create a commitment with another group that wishes to participate in this $1.4 billion project," the consulting firm said.

It noted the partnership with a new investment partner is expected by May or June this year and "immediately thereof we shall undertake our commitments."

"Commitments by a newly introduced third party joint venture partner is currently being negotiated. It is contemplated to be documented by May 2017 with capital commitments taking place within weeks from contract signing. We contemplate a settlement of the purchase of CAL shares at the agreed price on or about June 2017," RiskWise said.

"Due to the nature of the PAGCOR license, we will wait until our joint venture partner has joined our group formally, at which time we will undertake all licensing and permitting," the consultancy company further said.

It was in August 2016 when Calata announced its partnership with Sino and MRG for the construction and operation of Mactan Leisure City (MLC), an integrated casino resort eyed to rise in a 14-hectare site in Mactan Island.

In a previous disclosure, they had supposedly targeted to create in September 2016 a corporate vehicle Calata Land Inc. which would list on the stock exchange as a real estate investment trust (REIT) and have MLC as one of its properties.

Also, Sino and MRG had targeted to establish a Lapu-Lapu City-registered company Mactan Leisure City Management Corp. and incorporate all their equity interest upon determination of a casino operating partner. 

"Unfortunately, due to external factors, these timelines were not able to be met. We feel we are about nine-months behind schedule," RiskWise noted.

"However, we must note that our intentions with Calata are not limited to only one project site and that we continue to work with Calata and land owners to secure other sites. In this regard, this is a real estate business and nothing ever will happen perfectly and simply, particularly at the level we are working at," it said.

Site works on the Mactan Leisure City were previously targeted in January this year and that license from the Philippine Amusement and Gaming Corp. for the casino project would be secured in the latter part of the year.

Furthermore, RiskWise also clarified that "there have been no unfavorable outcome on Calata's business or financial health.

It said: "As with many foreign companies who had been working feverishly to undertake projects in the Philippines during 2016, we have experienced investor backlash as a result of political and social issues. These issues now having settled down, will enable us to re-navigate foreign investor sentiment with the view that we can conclude our business aspirations, as initially planned, however, late. It’s unfortunate however a reality that we must work through."

Shares of Calata were down 0.06 points to P2.18 apiece in early trading on the Philippine Stock Exchange yesterday. (FREEMAN)