February 22, 2015
Business World by Krista Montealegre | http://goo.gl/L1hXbP
FIRST PACIFIC Co. Ltd. is set to infuse fresh capital into Roxas Holdings, Inc. (RHI), allowing the Hong Kong-based conglomerate to gain control of the sugar miller and refiner.
First Pacific Managing Director Manuel V. Pangilinan said the company will raise its stake in RHI to 51%.
“It should be done pretty soon… Most of it is new shares so it will inject capital into RHI,” Mr. Pangilinan said on the sidelines of the sugar company’s stockholders’ meeting last week.
Based on its annual regulatory filing, RHI has issued 1.169 billion common shares as of end-September last year, out of its authorized capital stock of 1.5 billion common shares, so it has room to sell more primary shares. It has 259.424 million treasury shares.
RHI is the largest integrated sugar business in the Philippines and is the country’s third biggest sugar refiner. It has a refinery and a sugar mill in Batangas. It has two more sugar mills and an ethanol plant in Negros Occidental.
First Pacific, through FP Natural Resources Holdings BV, owns 34% of RHI after buying the 31% stake held by Philippine-listed Roxas & Co., Inc. (RCI) and additional shares from other investors in 2013. RCI, the listed real estate company of the Roxas family, is the sugar miller’s largest single shareholder with a 35% stake.
The entry of First Pacific in RHI ended the latter’s longtime search for a strategic investor in the face of tighter competition from imported sugar as Southeast Asian economies become a single economic bloc this year.
Apart from the sugar business, RHI is diversifying its revenue stream through ventures into ethanol and a partnership with Global Business Power Corp. for the development of cogeneration facilities. RHI Chairman Pedro E. Roxas had said these businesses could contribute 30% each to revenues in the next three to five years.
The company currently generates most of its revenue from producing both raw and refined sugar. Its consolidated revenues rose 38% to P8.3 billion in its fiscal year ended September 2014, while net income after tax improved 27% to P615 million.
MORE VICTORIAS SHARES?
The listed sugar company is also gearing up for a possible foray in Indonesia through a joint venture with the Salim Group of First Pacific.
Asked if First Pacific is buying more shares in Victorias Milling Co., Inc., another Philippine sugar company where the conglomerate has a minority interest, Mr. Pangilinan said: “For the moment no, but we’re in discussions with the other shareholders of Victorias to see what we can do together.”
Besides agriculture, First Pacific has interests in telecommunications, infrastructure and mining. The conglomerate’s biggest businesses are in the Philippines, including Philippine Long Distance Telephone Co. (PLDT), Metro Pacific Investments Corp. and Philex Mining Corp.
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