Balabac shareholders okay firm’s change in name, purpose

BY RUBY ANNE M. RUBIO, BusinessWorld Senior Reporter Listed holding firm Balabac Resources & Holdings Co. on Thursday secured the approval of its stockholders to change its function into a property firm and its name to Eton Properties Philippines, Inc. The shareholders’ approval was the penultimate step in the listing of Eton Properties at the Philippine Stock Exchange sans an initial public offering. With this, Eton Poperties only needs the Securities and Exchange Commission’s (SEC) approval of a petition to amend its articles of incorporation to reflect the change in its name and function. Last February, Balabac conducted a special board meeting to replace all its officials with Eton executives and to approve the change in name and function. The move, Balabac had said, was "part of the company’s overall restructuring to establish itself" as a property developer. Analysts have said the move was effectively a backdoor listing for Eton. Under SEC guidelines, a backdoor listing is deemed to have occurred when a listed company is acquired by an unlisted company and which acquisition results in a substantial change in the business, membership of the board of directors or voting structure of the listed firm. During the company’s annual stockholders meeting on Thursday, taipan Lucio C. Tan, chairman of Eton, urged shareholders to vote in favor of the changes and "join company management’s thrust towards growth and profitability." "Your loyalty and trust in our company may finally bear fruit as our company is poised to go into an investment project that we hope will further increase the value of our shares," he said. Mr. Tan said Eton’s entry into the real estate business was "very good because of the country’s improved political, financial and economic environment." "While our entry into property development may be considered by many as ’late,’ I say we are just right on time. We are now on a real estate boom which many believe will be longer-lasting than the one we enjoyed in the ’90s." He added that as a latecomer, "Eton Properties will draw on the experiences of those who went ahead of us and ensure that we create a working organization that will be attuned to the demands of the market, yet effectively insulated against the inherent risks in the business." Balabac’s shares went down 3.85% to P5 at Thursday’s trade. Balabac was incorporated in 1971 to engage in oil exploration and mineral development. On Aug. 19, 1996, it changed its business into a holding firm and included real estate development and oil exploration as among its secondary purposes. It then transferred all of its oil exploration-related assets and service contracts to Phoenix Energy Corp., a 38.44%-owned subsidiary company engaged in oil and mineral exploration. From 2003 to 2006, Balabac had no significant operations. Its revenues consisted of interest income and foreign exchange gains from cash equivalents and government bonds. Eton Properties’ name was taken from Eton, the corporate name of Mr. Tan’s firm in Hong Kong. Organized in 1986, the firm has real estate projects in Hong Kong, Shanghai, Xiamen and Beijing. Its latest project is a five-star hotel and commercial project in Shanghai called The Eton Hotel."We would like to capitalize on Eton’s track record for our Philippine projects," Mr. Tan said. Eton Properties will be using the land of other Tan firms such as Philippine Airlines, Inc., the Philippine National Bank (PNB) and Allied Banking Corp. It plans to spend some P10 billion over the next five years for its seven priority projects.