AbaCore MOU for development of $100 million condotel in Batangas
The disclosure of the proposed joint venture was made well after the market closed on Friday. According to the documents released to investors, AbaCore [ABA 1.14 0.87%] (through its subsidiary, Omnicor Industrial Estate & Realty Center, Inc. (OMNI)) will provide a 2-hectare lot and take 40% of the proposed joint venture, while Starfleet Innotech (SFIO) will take 60% of the joint venture, “to be paid in development works”.
The joint venture seeks to develop and sell up to 500 “condotel” units on the ABA-owned property in Montemaria, Batangas City.
The SFIO press release mentions the site’s proximity to “the world’s tallest Virgin Mary statue” and the “Verde Island Passage”, and how this will make it attractive to “tourists, pilgrims, expats and the Filipino global community”. SFIO is a New Zealand company that refers to itself as a conglomerate of “franchising, food manufacturing and distribution, coffee business, property development, as well as technology and software development”.
The company is traded over-the-counter in the US under the ticker “SFIO”, which refers to the company’s previous name, “Smokefree Innotech”. SFIO used to be in the business of products related to cannabis and vaping before it was backdoored by the conglomerate of “synergistic” industries.
MB BOTTOM-LINE
ABA is just padding its “MOU” stats at this point. MOUs are best thought of as a collection of “understandings” that two parties put on paper as an unenforceable framework to some future endeavor. Here, ABA and SFIO
are planning to create a joint venture, and this MOU simply outlines the broad strokes that the companies agree may form part of that enforceable agreement sometime in the future. You’ll notice a lack of timelines or explicit obligations beyond the intentions of the parties to act in “good faith”, and that’s by design: these documents are made to serve as a starting point to a period of due diligence, and nothing more.
ABA has signed a vast number of MOUs over the past year, but the trick with MOUs is that they’re nothing until they’re converted into something that is more enforceable and actionable. All of the numbers here sound impressive, but that feels like the point of this kind of disclosure.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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