Chemical Industries of the Philippines, Inc.CIP

Acquisition by Chemical Industries of the Philippines, Inc.’s (“CIP” or the “Company”) of the outstanding capital stock of Tierra Ariana Eco Land, Inc. (“Tierra Ariana”)

On 21 June 2023, the President and Chairman of CIP, Ms. Janice Eunicia C. Roxas-Chua, on behalf of CIP, executed a Share Purchase Agreement for the purchase of one hundred percent of ONE MILLION (1,000,000) common shares (the “Subject Shares”) of the capital stock of Tierra Ariana, with a par value of One Hundred Pesos (Php100.00) per share, representing One Hundred percent (100%) of the outstanding capital stock of Tierra Ariana for a total purchase price of One Hundred Million Pesos (Php 100,000,000.00).

The Transaction also includes the execution of a Deed of Assignment over Tierra Ariana Eco Land, Inc.’s Accounts Payable by its creditor, Vital Time International Limited, amounting to Eight Hundred Thirty Five Million, Three Hundred Fifty Four Thousand Nine Hundred Ninety Two Pesos (Php 835,354,992.00) to CIP for a consideration of Five Hundred Forty Six Million, Five Hundred Thousand Pesos (Php 546,500,000.00).

The foregoing acquisition is neither related to nor a continuation of the change of control of CIP that occurred sometime in 2019 and there will be no change in CIP's board and officers. Moreover, the former and the current management, as well as the current controlling shareholder of CIP are not related to and have no relationship with Tierra Ariana or its directors.

The Deed of Absolute Sale over the Subject Shares and Deed of Assignment over the Accounts Payable of Tierra Ariana will be executed on Closing Date when the required approvals or the Transaction have been secured and the turn-over of complete corporate records, among others.

After the Closing Date, CIP as beneficial Owner, pending the issuance of the Bureau of Internal Revenue Certificate Authorizing Registration for the sale of the Subject Shares, shall have irrevocable five (5) year proxies from the Sellers of shares of Pacific Unity SDN. BHD and Wessex Holdings Corporation and have CIP’s nominee directors elected to the Board of Directors of Tierra Ariana Eco Land, Inc. and have control and management. This includes being responsible of the continuation of the Bank of the Philippine Islands (“BPI”) Loan in the amount of One Billion Fifteen Million Pesos (Php 1,015,000,000.00), subject to BPI’s prior written consent being secured by Closing Date, and the payment of Tierra Ariana Eco Land, Inc.’s other Accounts Payables estimated at Sixty Five Million Pesos (Php 65,000,000.00).

In summary, the Share Purchase Agreement includes an agreement by the Parties to perform the following:

1. Acquisition by CIP of the Subject Shares for a total purchase price of One Hundred Million Pesos (Php 100,000,000.00).
2. Assignment by Vital Time of its credit against Tierra Ariana amounting to Eight Hundred Thirty-Five Million Three Hundred Fifty-Four Thousand Nine Hundred Ninety Two Pesos (Php 835,354,992.00) to CIP -for a consideration of Five Hundred Forty Six Million Five Hundred Thousand Pesos (Php 546,500,000.00)
3. Advance by CIP to Tierra Ariana of the amount of Sixty-Five Million Pesos (Php 65,000,000.00) for payment of outstanding liabilities of Tierra Ariana
4. Continuation by Tierra Ariana of the BPI Loan in the amount of One Billion Fifteen Million Pesos (Php 1,015,000,000.00) after CIP has acquired One Hundred percent (100%) of the outstanding capital stock of Tierra Ariana

The foregoing Share Purchase Agreement is not yet the definitive agreement between the parties. CIP will promptly make the necessary change or amendment and update the report once developments on the matter arise.

CIP’s purchase of 100% of the outstanding capital stock of Tierra Ariana will enable CIP to gain indirect control over the BPI Paseo de Roxas Condominium Corporation, the Condominium Corporation charged with the management of the Filinvest Financial Center Condominium Project (“Condominium Project”) and the entity with authority to develop the Condominium Project. Tierra Ariana is the registered owner of nineteen (19) out of the twenty (20) Condominium Certificates of Titles in the Condominium Project, which has been completely demolished. Pursuant to Section 2 of Republic Act No. 4726, as well as Article II, Section 1 of the By-Laws of the Condominium Corporation, such ownership vests Tierra Ariana with a 95% interest and effective control over the Condominium Corporation. The registered owner of the first floor of the Condominium Project is BPI Family Savings Bank.

The ultimate objective of CIP in the Transaction is to acquire indirect ownership over the parcel of land covered by Transfer Certificate of Title Number S-89953, registered under the name of the Condominium Corporation, and be able to redevelop the Condominium Project through the Condominium Corporation.

On 21 June 2023, a Share Purchase Agreement was entered into by and between Chemical Industries of the Philippines, Inc., and its individual Buyers/Nominees (“CIP” or “Buyers”), all of whom were represented by CIP’s president, Janice Eunicia C. Roxas-Chua, and Wessex Holdings Corporation and Pacific Unity SDN. BHD, along with their respective individual shareholders/nominees in Tierra Ariana (collectively referred to as “Sellers”), Tierra Ariana Eco Land, Inc. (“Tierra Ariana”), and Vital Time International Limited (“Vital Time”), for the purchase of (a) 60% equity interest of Wessex Holdings Corporation, including the qualifying shares of its nominees in Tierra Ariana, and 40% equity interest of Pacific Unity SDN, BHD., including the qualifying shares of its nominees in Tierra Ariana, respectively, and (b) the execution of a Deed of Assignment over Tierra Ariana Eco Land, Inc.’s Accounts Payable by its creditor, Vital Time International Limited, amounting to Eight Hundred Thirty Five Million, Three Hundred Fifty Four Thousand Nine Hundred Ninety Two Pesos (Php 835,354,992.00) to CIP for a consideration of Five Hundred Forty Six Million, Five Hundred Thousand Pesos (Php 546,500,000.00).

Major events required to bring about the completion of the Transaction are as follows:
1. Tierra Ariana and the Sellers under the Share Purchase Agreement have obtained the prior written consent from BPI allowing the sale of the Subject Shares to the Buyers. The Subject Shares are pledged and the nineteen (19) Condominium Certificates of Title are mortgaged with BPI.

Closing of the Deed of Absolute Sale over the Subject Shares and the Deed of Assignment of the Accounts Payable by Vital Time shall occur within one hundred twenty (120) days from the Execution Date of the Share Purchase Agreement on 21 June 2023, or such other date as may be agreed upon by the Parties in writing.

Other than the issuance of the BIR Certificates Authorizing Registration on the transfer of the Subject Shares, there are no other related regulatory requirements, to the best of the Parties’ knowledge.

The Transaction Price amounts to One Billion Seven Hundred Twenty-Six Million Five Hundred Thousand Pesos (Php 1,726,500,000.00) or its US Dollar equivalent (using the bank exchange rate on Closing Date as approved by the Sellers) which comprises of:

1. 100% of the outstanding capital stock of Tierra Ariana Eco Land, Inc., amounting to 1,000,000 shares to be purchased with a total purchase price of Php 100,000,000.00, which are:
a. Wessex Holdings Corporation, including the qualifying shares of its nominees in Tierra Ariana - 600,000 shares to be sold
b. Pacific Unity SDN. BHD, including the qualifying shares of its nominees in Tierra Ariana - 400,000 shares to be sold

2. For the following Tierra Ariana payables, CIP shall, on Closing Date:
a. Transfer to a bank account as may be designated by Wessex and/or Pacific Unity Five Hundred Forty Six Million Five Hundred Thousand Pesos (Php 564,500,000.00), or its US Dollar equivalent for the payment of Tierra Ariana’s outstanding payables to Vital Time as of Closing Date.
b. Deposit in the Designated Company Account Sixty Five Million Pesos (Php 65,000,000.00) representing Tierra Ariana’s computed accrued and outstanding payables as of Closing Date and which are expected to be settled following the Closing Date.
3. The remaining balance of the BPI Loan as of Closing Date amounting to One Billion Fifteen Million Pesos (Php1,015,000,000.00) (“BPI Loan Amount”) forms part of the Transaction Price. The said amount will be continued by Tierra Ariana after the Closing Date.

The amount of One Hundred Million Pesos (Php100,000,000.00) is based on the par value (Php 100.00) per share of the 1,000,000 Tierra Ariana shares to be acquired (book value was fifty-eight centavos [Php 0.58] per share pursuant to the audited financial statements of Tierra Ariana for the year ended 31 December 2022).

The amount of Five Hundred Forty-Six Million Five Hundred Thousand Pesos (Php 546,500,000.00) was the consideration agreed upon by Vital Time for the Deed of assignment of its credit.

The Sixty-Five Million Pesos (Php 65,000,000.00) is based on the other Accounts Payables in the books of account of CIP.

The One Billion Fifteen Million Pesos (Php 1,015,000,000.00) pertains to the remaining balance of the BPI Loan of Tierra Ariana which will be continued by Tierra Ariana after CIP has acquired One Hundred percent (100%) of the outstanding capital stock of Tierra Ariana on Closing Date.

Thus, the total value of the transaction shall be One Billion Seven Hundred Twenty-Six Million Five Hundred Thousand Pesos (Php 1,726,500,000.00).

CIP has previously paid the amount of One Hundred Million Pesos (Php100,000,000.00) to Tierra Ariana as a Reservation Deposit. This Reservation Deposit shall be applied as payment for the Purchase Price on the shares. Tierra Ariana, while under the control of the Sellers, shall remit to the Sellers the Reservation Deposit, which shall constitute as full payment and settlement for the sale of the Subject Shares.

Moreover, to enable Tierra Ariana to settle its accrued and outstanding payables, CIP shall, on Closing Date:
(a) transfer to a bank account as may be designated by Wessex and/or Pacific Unity the amount of Five Hundred Forty-Six Million Five Hundred Thousand Pesos (Php546,500,000.00), or its US Dollar equivalent to pay for Tierra Ariana’s outstanding payables to Vital Time as of Closing Date, and
(b) deposit in the Designated Company Account the amount of Sixty Five Million Pesos (Php65,000,000.00) representing Tierra Ariana’s computed accrued and outstanding payables as of Closing Date and which are expected to be settled following the Closing Date.

1. All consents, approvals and authorizations, if any, required under Applicable Law and relevant contracts and agreements to enable the Sellers to complete the sale of the Subject Shares to the Buyer on Closing Date have been duly obtained by the Sellers, and continue to be in effect as of Closing Date.
2. All consents, approvals, authorizations, if any, required under Applicable Law to enable CIP to complete the purchase of the Subject Shares from the Sellers on the Closing Date have been duly obtained by CIP, and continue to be in effect as of the Closing Date.
3. Tierra Ariana and the Sellers have obtained the prior written consent from BPI allowing the sale of the Subject Shares to the Buyers.
4. Tierra Ariana has obtained approval from BPI for BPI to:
a. Show the stock certificates of the Subject Shares on Closing Date for the Buyers to view and the Sellers to endorse;
b. Release the stock certificates of the Retiring Directors for cancellation and issuance of stock certificates to the Incoming Directors on Closing Date
c. Release the stock certificates to the Company’s Corporate Secretary on Completion Date for cancellation and issuance of new stock certificates in favor of the Buyers; and
d. Show the owner’s duplicate original of TCT No. S-89953 on Closing Date for the Buyers to view.

Primarily engaged in realty business and realty development, including the purchase, lease, and sale of real estate. Provided that the corporation shall not solicit, accept, or take investments/placements from the public, neither shall it issue investment contracts.

Tierra Ariana previously purchased nineteen (19) condominium units (2nd to 20th floor) with fifty (50) parking slots in the Filinvest Financial Center Condominium Project located at BPI Card Center 8753 Paseo de Roxas Makati City, and effectively gained control over the BPI Paseo De Roxas Condominium Corporation. Tierra Ariana completely demolished the Condominium Project in preparation for a redevelopment.

The Company will have additional assets indirectly through a subsidiary that can redevelop a condominium project.

Kindly note that the foregoing Share Purchase Agreement is not yet the definitive agreement on the acquisition/transfer of the Subject Shares between the parties. Rather, it is merely an agreement to sell and to purchase shares upon mutual agreement by the Parties at a later date, once the closing conditions imposed under the agreement are either fulfilled and/or waived.

Further to the 15 June 2023 date of approval above, listed below are the dates of approval by the Board of Directors of the Corporate Parties to the Transaction:

1.Chemical Industries of the Philippines, Inc. – 15 June 2023
2. Wessex Holdings Corporation – 5 June 2023
3. Pacific Unity SDN. BHD. – 9 June 2023

This transaction does not require stockholders approval on the part of the Seller Tierra Ariana since it is within the ordinary course of its business, and well within its primary business purpose. Also, this transaction will not require the approval of the CIP shareholders since CIP is essentially a holding company, authorized to invest in, hold, own, purchase and otherwise acquire interest in corporations, and other entities engaged in commercial enterprises.

Please find attached herewith the following additional information on Tierra Ariana:

1. Certificate of Incorporation
2. Latest Amended Articles of Incorporation
3. Latest Amended By-Laws
4. Latest General Information Sheet
5. Latest Audited Annual Financial Statements