Biz Buzz: Taxpayer supreme
Sure, some rabid pro-administration people are trying to paint a picture of a super-cozy relationship between Megaworld Corp. and impeached Chief Justice Renato Corona (whether you believe it or not depends on which side of the political fence you stand).
What few know, however, is that Megaworld chair and president Andrew Tan is the country’s biggest individual taxpayer, according to the Bureau of Internal Revenue.
This was confirmed by no less than Internal Revenue Deputy Commissioner Nelson Aspe, who wrote the real estate tycoon recently, congratulating him for paying a total of P98.5 million in income tax for 2010.
“With this accomplishment, you are ranked number one in our latest tally of individual taxpayers with the highest income tax payments actually received in cash for the taxable year 2010,” the letter read.
Taipans are, of course, rarely on the BIR’s list of top individual taxpayers because the bulk of their earnings come through their corporations (which are the country’s top corporate income taxpayers), but Tan is one of those rare businessmen who are top taxpayers in the individual and corporate categories.
Now, if only people were as faithful in meeting their tax obligations to the government …—Daxim L. Lucas
Consumer backdoor play
LMG Chemicals Corp. sizzled in the stock market last week on rumors that a new investor was in talks to take over the company. The prospective sale was something that the company’s chair Antonio Garcia himself had talked about in public.
What excited the market, however, was not the prospect of LMG itself being finally sold but the kind of investor that’s now interested in it. After Century Properties’ entry in East Asia Power and Ricky Razon’s in AAI, local investors who have pocketed gains from the market’s run-up are looking for a fresh speculative play.
Industry sources said that after several potential transactions fizzled out in the past, LMG is now being eyed as a backdoor listing vehicle by a well-entrenched consumer-related group that is keen on infusing P3 billion worth of assets.
Clue #1: This group has a cash flow/Ebitda [earnings before interest taxes, depreciation and amortization] of about P1 billion. Clue #2: It has plans to open 300 stores in China.
One caveat though is that LMG’s feuding shareholders will obviously have to approve any proposed transaction together (but they are not on speaking terms). The indication is that one side of the fence is more eager to conclude a deal, yet the other side—by virtue of some attached shares—has the capability to veto any transaction. While the other side may also be willing to sell at the right price, it is not a party to the discussions to date.—Doris C. Dumlao
Speaking of backdoors …
Tycoon Enrique “Ricky” Razon Jr. will formalize on Monday the conversion of dormant Active Alliance Inc. into his holding company for his upcoming $1.2-billion tourism/gaming complex. A special stockholders’ meeting is scheduled Monday morning in Subic Bay to rename AAI “Bloomberry Resorts Corp.,” change its purpose from manufacturing to a holding company and jack up its authorized capital to P15 billion from P120 million.
The increase in capital will enable the corporation to acquire 100 percent of Sureste Properties, developer of the Las Vegas-style gaming project at Pagcor City.—Doris C. Dumlao
Petron’s turnaround
Not a few people thought that the bosses at San Miguel Corp. were crazy when they acquired Petron Corp. at a time of extreme uncertainty in 2008. After all, the country’s largest petroleum refiner and distributor did lose billions that year due to see-sawing oil prices.
Today, however, a look at Petron’s bottom line shows the dramatic turnaround that the company has undergone.
Indeed, Wealth Securities predicts that the company will show a compounded annual growth rate of 40 percent from the time San Miguel took over to 2013.
The stockbroker thinks that the company should be valued at around P16 a share, based on its financial models. More importantly, however, Wealth believes that the increased free float of the company (caused by its retirement fund’s decision to release more shares into the market) will make the listed firm a candidate for inclusion in the Philippine Stock Exchange index when the index components are next adjusted.
Wealth Securities’ optimism on the stock is due mainly to the fact that Petron—under private management—is more profit-oriented, compared to when it was government-run (where it tried its best to sell fuel prices cheaply).
The stockbroker also believes that the company stands to gain significantly if parent San Miguel ends up owning Philippine Airlines, as well as from the recently acquired Esso in Malaysia.
It’s not too late for doubters to change their minds.—Daxim L. Lucas
Staying liquid
Unlike his predecessor who invested in paintings of Filipino masters Juan Luna (Parisian Life) and Amorsolo (Under the Mango Tree and Rice Field), GSIS president Robert Vergara is not in favor of acquiring more art pieces as a form of investment for the pension fund.
Vergara, who was a former global fund manager based overseas, says there are three things that the pension fund always considers in investing—liquidity, safety and yield. While art is itself an asset class, it’s not an attractive investment for GSIS in the context of liquidity and yield.
As such, he says the fund will abstain from any more art investments except for the art collection accumulated from its annual sponsorship of an art competition for upcoming artists (which he says doesn’t cost much). Incidentally, the GSIS will soon donate art collected from its annual art competition to the National Museum.
The only departure from the GSIS’ traditional investment strategy, he says, will be its participation in a $750-million Philippine infrastructure fund being set up by multilateral partners.—Doris C. Dumlao
Mrs. Pidal’s tears
Not everybody is buying the grieving widow image portrayed these days by former Philippine Stock Exchange chair Aleli Arroyo.
As some of her former colleagues at the PSE say, how can Arroyo suddenly be involved in the death of her estranged husband, Iggy Arroyo, when she and “Mr. Pidal” have not been together since 2005.
“Crocodile tears,” that’s how some of PSE brokers sneeringly describe the crying jag of Arroyo, who had earlier sued for support and sought an annulment.
What could be the motive? Abangan.—Tina Arceo-Dumlao
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