First Pacific eyes majority ownership of Roxas Holdings

MANILA, PHILIPPINES – Hong Kong-based First Pacific Company Ltd. of Manuel V. Pangilinan plans to acquire majority ownership of diversified sugar company Roxas Holdings Incorporated before 2014 ends.

First Pacific plans to consolidate its ownership in Roxas Holdings by increasing its stake to more than 50% from its current 34%. Roxas & Company Inc (RCI), the holding company of the Roxas Group, sold 279 million shares, representing 31% of Roxas Holdings, to First Pacific Natural Resources Holdings BV for P8 ($0.18*) per share in November 2013.

RCI of businessman Pedro Roxas remained a major shareholder with 35% of Roxas Holdings and shares management with First Pacific.

If plans proceed, the company will conduct a tender offer to other minority shareholders of the company, Pangilinan said.

Under the Securities Regulation Code, a mandatory tender offer is triggered when an investor accumulates more than 51% of the total outstanding shares of a listed company. The acquiring entity should then offer to buy all shares held by minority stockholders.

However, Pangilinan did not specify if the acquisition of additional shares in Roxas Holdings will be through the purchase of new shares or secondary shares from selling shareholders.

Proceeds from the sale of primary shares is eyed to finance Roxas Holdings’ expansion in time for the ASEAN integration in 2015. Proceeds from the sale of secondary shares will go directly to the selling shareholders.

Roxas Holdings is the 3^rd biggest sugar refiner in the Philippines with 3 sugar mills in Batangas and two in Negros Occidental. It also has an ethanol plant in Negros Occidental. Its sugar mills have a combined capacity of 38,500 tons of cane per day.

Roxas Holdings consolidated sugar manufacturing subsidiaries are Central Azucarera Don Pedro, Inc; Central Azucarera de La Carlota, Inc; and bioethanol producer Roxol Bioenergy Corporation.

First Pacific earlier said that it is looking for more investment opportunities in the Philippine sugar industry. The group is looking into investing in Philippine agriculture to supply the raw material needs of unit PT Indofood Sukses Makmur Tbk, one of the biggest food companies in Indonesia.

First Pacific also has an 8.3% interest in Bacolod-based sugar milling firm Victorias Milling Corporation Inc. (VMC), where Lucio Tan’s LT Group Inc, in August, raised again its stake. The company’s aggregate interest in VMC, including the convertible notes, amounts to 716,50.3347 equivalent to 23.5% of the total issued and outstanding shares.

This partnership of RHI with First Pacific will strengthen RHI and prepare it for the industry consolidation that will take place with the advent of the ASEAN integration in 2015. – Rappler.com