Quick Take: Macay's suspension lifted and 2 more market updates
Macay Holdings [MACAY 4.59] [link] had its suspension lifted yesterday, after the Yao Family provided substantial disclosure of its plan to use MACAY shareholder money to purchase 100% of the outstanding shares of RC Global Beverages Inc (RCGBI) from itself. The deal, which will transfer one share representing 100% of RCGBI to MACAY, is worth $21.4 million in cash. As the disclosure notes, both MACAY and the company that sold RCGBI to MACAY are owned by Mazy’s Capital, which is owned by the Yao Family.
MB Quick Take: Not a big fan of this weird round of families using cash from their publicly-traded companies to buy assets from private companies that they own. Is the right to sell RC Cola globally, and (in MACAY’s words), diversify its “geographic and political/country risk” through the opportunity to earn in foreign currencies, worth $21.4 million? It was to the Yao Family. But which one? The Yao Family that paid $21.4 million, or the Yao Family that just got $21.4 million in cash?
Boulevard Holdings [BHI 0.05 3.57%] [link] notified shareholders that it will fail to submit audited 2022 financials by the extended deadline of October 14. The PSE also notified shareholders (and potential investors) that BHI will be suspended on October 14 for this failure, and will remain suspended until it does so. BHI’s notice indicated that it “estimates” to be done the audit “on or before the end of October 2022”, and that “more personnel” have been added to help complete the report.
MB Quick Take: This company acts like it has no respect for its shareholders. This will be the third year in a row that the stock will have been suspended for management’s failure to adhere to the exchange’s basic reporting standards. Last year, BHI was suspended for almost 7 months while it tried to audit its financials. Last year BHI threw its auditors under the bus for the delay. So what’s it going to be this year?
SEC [link] has approved our first corporate debt vehicle (CDV), by ATR Asset Management Inc (ATRAM), called “Atram Unitized Corporate Debt Vehicle Inc.” (ATRAMDV). A CDV is a company that sells shares in itself, and uses the money raised to purchase debt like bonds, notes, and commercial papers, from large- and medium-sized corporations. The shares of ATRAMDV will not be traded publicly, and will only be made available to qualified buyers like banks and investment houses, and people who make at least P10 million per year or have a net worth that is greater than P30 million.
MB Quick Take: Shares in ATRAMDV are obviously not going to be a part of your average PSE investor’s portfolio, but the creation of the investment type is interesting as it grows the market for corporate debt. Issuing corporate debt is an important way for companies to raise money, and indeed, this CDV initiative was pushed during the pandemic as a means for cash-starved companies to raise money through this new angle to the debt market. Large companies are always going to be fine, but the real winners here are the small- and medium-sized firms that will have a new option when it comes to selling debt.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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