CHII Reddit Mentions | ChartExchange

#Happy Friday, Barkada --
#The PSE gained 7 points to 6127 ▲0.1%
Feedback has been overwhelmingly positive for MB's shift to MWF news coverage and the inclusion of **MB FRIENDS** posts on Tuesdays and Thursdays.
While it's been a little bit of extra work for me at the start to figure out the logistics of the program and do dumb little things like make images and thumbnails, I think this is going to allow me to continue producing MB while also hitting my family and social obligations as they arise.
Good luck today, and I hope you all have a great weekend!
#▌[In today's MB](https://mailchi.mp/merkadobarkada/lfm-rocked-by-multiple-governance-failures):
- **Megawide takes 13% stake in Citicore Renewables**
- Repayment of parent co's debt
- Some cash, some CREC shares
- Is it best for MWIDE shareholders?
- **Liberty Flour bleeds P300M on governance failures**
- Minutes cite "nine distinct" failures
- Problems with related-party transactions
- LFM financial health under pressure
- **Del Monte commits to avoiding suspension**
- Q1 quarterly prompted stock surge
- Possible suspension related to annual report
- Might come down to the wire
#▌[Daily meme](https://i.imgur.com/fbgXoQZ.png) | [Subscribe (it's free)](https://mailchimp.us12.list-manage.com/subscribe?u=925d69480ecfc297864a79dc6&id=17742706f1&utm_source=mb) | [Today's email](https://mailchi.mp/merkadobarkada/lfm-rocked-by-multiple-governance-failures)
#▌Main stories covered:
>- **[NEWS] Megawide takes 13% stake in Citicore Renewables...** **Megawide** [MWIDE 2.40 ▲16.5%; 2269% avgVol] [[link](https://edge.pse.com.ph/openDiscViewer.do?edge_no=ce75363f364ede29ec6e1601ccee8f59)] disclosed that it will receive ₱9.4 billion from parent firm **Citicore Holdings Investment Inc.** (CHII) and sister company **Citicore Power Inc.** (CPI) to help pare down debt. Of the total, ₱4.69 billion will come from CHII and ₱4.73 billion from CPI, covering both principal and accrued interest. The deal comprises a ₱3.5-billion cash payment and ₱5.9 billion in **Citicore Renewable** [CREC 4.26 ▲0.7%; 21% avgVol] shares, which will give MWIDE 1.47 billion shares equivalent to around 13% stake in the listed energy affiliate. MWIDE chairman and CEO Edgar Saavedra described the transaction as a “pivotal shift.” Final details—including the exact number of shares and valuation—remain subject to validation of external independent parties, regulatory approvals and “reasonable market movements.”
> - ***MB:*** Ok, so in plain terms, what happened is that MWIDE’s parent company borrowed money from MWIDE, and now that parent company is paying MWIDE back with a combination of cash and assets. It just so happens that the asset being used to settle the debt is a 13% stake in Citicore Renewable Energy [CREC 4.26 ▲0.7%; 21% avgVol], which is a sister company to MWIDE (meaning they share the same ownership/control group). CREC shareholders would only really care about this if the transfer was done at a price that was alarmingly low. We don’t know the exact number of shares that will cross, but this is at about a 4.8% discount to market, which is similar to the discount we see when property developers sell block shares of their REIT subsidiaries. What about MWIDE shareholders? Cash is king, so I think shareholders would always prefer to see MWIDE fat with cash that it can push down to **PH1 World Developers** to fuel that ambitious plan, but in this case, they do actually get a bunch of cash and also a solid asset at a slight discount. MWIDE isn’t prevented from selling its CREC stake in a block sale for cash. It’s not likely, but they aren’t prevented from doing it.
>- **[NEWS] Liberty Flour Mills bleeds ₱300M due to governance failures...** **Liberty Flour Mills** [LFM 24.40 ▼3.6%; 0% avgVol] [[link](https://edge.pse.com.ph/openDiscViewer.do?edge_no=4fc24543a2073ae3ec6e1601ccee8f59)] disclosed that it could face losses of at least ₱300 million from “nine distinct” governance issues tied to former officers, compounded by unpaid distributor receivables that heavily weighed on the 67-year-old company’s financial health. Minutes of the 27 August 2025 stockholders meeting showed the matters—one already referred to external legal counsel—had been repeatedly discussed in the past four to five board meetings. Shareholders pressed the company on its related-party dealings with **Parity Values Inc.**, a stockholder and long-time distributor since the 1970s, particularly on uncollected receivables. Company officials said former officers should pursue legal action if Parity Values is found to have breached principles of good governance, disclosure, transparency, or fiduciary duty. Looking ahead, LFM said a payment plan is in place to cut the receivable by at least 40% next year. Still, the issues have already strained its balance sheet, forcing the sale of its Liberty Building in Makati City.
> - ***MB:*** Ugly situation, but a good example of why governance is so important. It’s not sexy to implement checks and balances. It’s not attention-grabbing to appoint independent directors to a related-party transaction committee. It’s not “fun” to act in the best interests of shareholders when doing so takes time and effort, and might expose you to political or social pushback within your own organization. But doing the work of governance is essential to building a culture of transparency, which is itself essential to the task of... avoiding whatever this is. This isn’t just a problem for smaller firms with a declining outlook. Remember when **PLDT** [TEL 1109.00 ▼1.4%; 264% avgVol] shareholders were dragged through the mud on that weird ₱48 billion capex overspend issue in 2022? Large firms are not immune.
>- **[UPDATE] Del Monte Pacific commits to avoiding suspension...** **Del Monte Pacific** [DELM 4.18 ▲21.9%; 757% avgVol] [[link](https://edge.pse.com.ph/openDiscViewer.do?edge_no=b83f9fa5f3b56f38ec6e1601ccee8f59)] faces possible trading suspension after missing the deadline for its FY2025 annual report. In a 9 September 2025 notice, the **Philippine Stock Exchange** said DELM failed to file the report by the extended deadline of 28 August, violating reportorial rules. In a 10 September 2025 disclosure, DELM said it would submit the report by 15 September, citing circumstances “beyond the company’s full control,” particularly consolidation issues with its U.S. unit, **Del Monte Foods Holdings**, which filed for bankruptcy. Ultimately, the PSE warned that trading in DELM shares will be suspended starting 15 September 2025 if the company does not meet its reportorial obligations by 12 September 2025.
> - ***MB:*** Shares of DELM shot up 22% yesterday after it disclosed a huge jump in quarterly profits, but that disclosure won’t prevent the stock from being suspended on Monday morning if the company is unable to get its Annual Report to the EDGE disclosure server before the opening bell. If DELM doesn’t submit its Annual Report by the end of trading today, the PSE will issue a suspension notice, but that notice won’t take practical effect until Monday morning when the market reopens. In such case, DELM would have the rest of Friday (and the weekend) to complete the job. If they submit before the bell on Monday, it’s a “no harm, no foul” situation: the PSE will lift the suspension and DELM will be open for trading as if nothing happened. If not, well, then all those DELM traders that rushed in after the quarterly report will just have to wait in suspension limbo for DELM to figure it out.
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