TOKYO: Metro Pacific Investments Corp. (MPIC) has yet to complete its acquisition of roughly a 35-percent stake in Axelum Resources Corp. (ARC) after the two parties mutually agreed to extend the due diligence process.
Chaye Cabal-Revilla, MPIC chief finance, risk, and sustainability officer, said in a media briefing last Friday that the conglomerate’s P5.3-billion investment in the coconut product manufacturer and exporter was “still in process.”
“The target due diligence was extended because Axelum is basically public, and you know their numbers because they disclose them,” said Cabal-Revilla, noting that the due diligence was adjusted from the October 31 deadline.
“That’s the basis of the extension of the due diligence [because] the expected outcome in terms of performance in our earlier due diligence has not happened.”
Cabal-Revilla said the extension was “mutually” decided since Axelum still needed to rework their numbers and “we have to relook and redo the extended due diligence.”
In February, MPIC disclosed that it was acquiring a 34.76-percent stake in Axelum through Metro Pacific Agro Ventures, Inc., its wholly owned agriculture subsidiary.
Following the lower-than-expected financial performance of Axelum this year, Cabal-Revilla said they still have to “dig deeper into the assumptions and the KPIs (key performance indicators)” before closing the deal.
A meeting between officials of MPIC and Axelum is set for this week to discuss the latter’s growth outlook for next year, she noted.
“We did the due diligence early last year, towards the end of the year, and earlier this year, but through the unfolding results in 2023, they’ve been very far from their numbers,” she explained.
For the nine months ended September, Axelum Resources incurred a net loss of P118.12 million, reversing from the P717.28-million profit posted a year earlier.
Consolidated net sales during the period dropped to P4.28 billion from P5.31 billion.
Cabal-Revilla emphasized that the conglomerate remained interested in Axelum but said the valuation was in discussion.
“They were saying that they (ARC) envisaged the US (United States) market to be back at the pre-pandemic level,” she added. “The US has been a problematic area for them, and so they have to take a look at their sales distribution [and] logistical costs. So those are the things that they’re taking a look at.”
Axelum Resources manufactures and exports high-quality coconut products and is one of the major suppliers of Vita Coco, a global market leader in coconut water.
Axelum shares slipped by four centavos, or 2.13 percent, to close at P1.84 apiece last Friday amid a 0.43-percent drop in the benchmark Philippine Stock Exchange index.