In a Special Meeting of the Board of Directors on 13 October 2022, Premiere Horizon Alliance Corporation (“PHA”) decided that it will no longer pursue its planned acquisition of 33% of SquidPay Technology, Inc. (“SPTI”), valued at Php561 million.
The decision of the Board of Directors has been made following the determination that purchasing SPTI is no longer in the best interest of PHA and its shareholders given SPTI’s inability to operate a viable business. The planned acquisition of 33% of SPTI was announced on 18 November 2021, at a time when the demand for e-wallets was rapidly rising. SPTI was earlier granted its Operator of Payment System (“OPS”) license, followed by its Electronic Money Issuer (“EMI”) license.
As previously disclosed on 29 October 2020, PHA and an investor group led by Mr. Marvin Dela Cruz entered into a Memorandum of Agreement (the “MOA”) for an equity infusion through a total subscription of 2,803,030,303 shares (the “Subscription Shares”) equivalent to 55% ownership of PHA.
Subscription to these shares was valued at Php0.33 per share, for a total consideration of Php925 million. Of this amount, Php300 million was to be in cash and the balance of Php625 million was to be via a combination of cash and/or infusion of SPTI shares over a period of two years as set forth in the MOA which formed the basis of the subscription agreements. During this period, the parties were to discuss and agree on the manner by which the unpaid subscriptions will be paid. PHA during the past several months had tried to contact and reach out to Mr. Marvin Dela Cruz to discuss the payment of the unpaid subscriptions, to the extent that formal letters were sent out. PHA has noted that SPTI has not been able to execute on its planned projects nor attain its objectives. Notably, roll-outs in key cities and partnerships with government agencies did not materialize. SPTI has also been embroiled in recent financial troubles that make it clear that SPTI will not add value to PHA. Mr. Dela Cruz has also not responded to PHA’s requests for meetings to discuss the valuation of SPTI.
From the total subscription of 2,803,030,303 shares, the investor group of Mr. Dela Cruz has already paid fully 1,124,658,104 shares at a subscription value of Php317,137,174.00. PHA has a subscription receivable of Php553,862,825.67 from the investor group for the remaining 1,678,372,199 shares.
Since PHA will no longer be acquiring SPTI, the investor group will be required to pay the remaining balance in cash. As provided in the MOA, the Board has reiterated and confirmed that the investor group has until 29 October 2022 to complete the payment as per the terms of the agreement.
PHA will continue to focus on countryside development with its core assets and subsidiaries. Goshen Land Capital, Inc. (“GLCI”), one of the biggest real estate developer in Northern Luzon, continues to expand its operations with an ongoing 218-unit vertical project in Baguio City, which is already fully sold. To date, GLCI has built 18 buildings and delivered almost 2,000 condominium units. GLCI is also strengthening its foothold in Central Luzon and has opened sales branches in Cabanatuan City and in Capas, Tarlac. Premiere Georesources and Development, Inc. (“PGDI”) has completed a study to develop its 10,000 hectares of limestone deposits. In addition, PGDI is expanding its ongoing contract mining services for Cagdianao Mining Corp., a wholly-owned subsidiary of Nickel Asia Corp., the biggest nickel mining firm in the country. West Palawan Premiere Development Corp. is already in the initial stages of developing its more than 500-hectare property in Puerto Princesa City in Palawan. |