MVP exits Victorias Milling Company

MANILA, Philippines – Hong Kong’s First Pacific Limited Company led by tycoon Manuel V. Pangilinan (MVP) is exiting sugar milling firm Victorias Milling Company, Incorporated (VMC).

VMC told the Philippine Stock Exchange (PSE) on Tuesday, February 16, that its board of directors approved the acquisition of 365 million shares held by First Pacific-owned First Agri Holdings Corporation, Hargate Investments Limited, and Nestar Investments Limited in the company.

This is at a price of P5 ($0.10) per share for a total consideration of P1.825 billion ($38.42 million), the PSE disclosure read.

The acquisition price represents a 9.8% premium the stock’s closing price of P4.55 ($0.096) on Friday, February 12.

VMC on Monday, February 15, asked the PSE to temporarily suspend trading of its shares pending disclosure of material information.

The trading suspension was lifted at 10 am on Tuesday.

Informed sources said First Pacific initially offered its VMC shares to other shareholders of the company including LT Group of business tycoon Lucio Tan, which owns 23.6% in sugar milling firm. 

There were, however, no takers.

Sources said VMC decided to purchase the First Pacific shares, as it sees great value and good prospects in the company. VMC earlier expressed plans to venture into co-power generation by building power plants running of bagasse from its sugar milling plants. 

The 365 million shares that VMC will acquire will be placed under treasury shares.

VMC, however, did not say how it will fund the acquisition.

As of end-November 2015, VMC had cash and cash equivalent worth P1.6 billion ($33.68 million).

It was in April 2014 when First Pacific started buying Victorias Milling shares from the open market equivalent to 5.78%.

After buying more shares from the market, First Pacific also acquired 100% interest.

MVP to concentrate on Roxas?

Luis Limlingan, managing director of Regina Capital Development Corporation, said First Pacific’s exit in VMC will allow the company to concentrate on its other sugar milling firm, Roxas Holdings Incorporated.

Roxas Holdings earlier reported a decline in net income for the fiscal year 2015 and a net loss for the first quarter.

“The deal came at good time because VMC was profitable the last quarter. Maybe it is a good time for MVP to exit and concentrate on his sugar business,” Limlingan said.

Roxas Holdings, which is 51% owned by First Pacific, registered a net loss of P125 million ($2.63 million) in the first quarter of fiscal year ending December 2015, a turnaround from a P9-million ($189,485) net income recorded in the same period last year amid operational challenges affecting its two manufacturing plants.

Sources said First Pacific may use the proceeds from the sale of its stake in VMC to finance the planned stock rights offering of Roxas Holdings. – Rappler.com

$1 = P47.50