August 27, 2010

PT International Alliance Foods Indonesia to borrow from Rabobank

PT International Alliance Foods Indonesia (PTIAFI), a canned tuna subsidiary of Alliance Select Foods Inc will obtain a US$3 million loan from Rabobank.

Alliance Select, formerly Alliance Tuna International, Inc, (ATII), said that the decision to enter into a loan agreement was approved on August 20 during a board meeting.

The board then authorised the business to execute a guarantee arrangement and a subordination deed in favour of Rabobank, as part of the security for the working capital facility.

Additionally, as was announced in late May to the Philippine Stock Exchange, Alliance intends to increase its ownership in the Indonesian unit to 89.98% from 79.92% by means of an equity infusion using outstanding cash advances from the subsidiary.

The firm will up its equity investment in PT Alliance from US$825,600 to USD$4.5 million by turning the US$3.67 million cash advance into 3.67 million shares at a par value of US$1 each. This increase must be approved by the PT Alliance board and by the Department of Law and Human Rights of Indonesia.

Alliance Select's profits rose slightly to US$1.04 million in the first half of the year, from US$1.03 million during previous year, as revenues fell to US$22.62 million, from US$25.87 million.

In 2010, the company will begin to broaden the market of Vietnamese company Hiep Thanh Seafood Joint Stock Company (HTS), which Alliance is set to purchase for US$13.1 million after having signed a Memorandum Agreement in late June. This gave ATII an exclusive 90-day period beginning on July 5 to conduct due diligence on HTS to invest in it.

ATII amended its incorporative papers to change its name to Alliance Select Foods International Inc in May, and to enlarge its processing and canning capabilities to include food products beyond seafood as well as preserving, preparing, packing, repacking, distributing, and other activities.