MANILA, Philippines?(UPDATE) The Cebu-based Aboitiz family has agreed to sell its century-old shipping business to Kuwaiti-backed rival, Negros Navigation Co. Inc (Nenaco).
In a disclosure to the Philippine Stock Exchange, the holding firm Aboitiz Equity Ventures (AEV) said its board had unanimously agreed to the sale of Aboitiz Transport Systems Corp. (ATS). AEV, together with sister firm Aboitiz & Co. (ACO), owns around 92 percent of ATS.
?AEV expects to receive approximately $81 million? from the sale, the company said.
?The agreement also requires Nenaco to make a tender offer for all ATS shares owned by the public at the same purchase price to be paid to AEV and ACO,? the disclosure document said.
In 2009, Nenaco?s parent company KGLI-NM Holdings Inc., a company owned by Kuwaiti Gulf Link Investments, offered to buy the Aboitiz family?s transport business. However, the deal fell through after the Kuwaiti group?s finances were strained by the financial crisis.
This time around, Nenaco expects to fund the ATS purchase with equity investments from China-ASEAN Marine B.V., a Netherlands incorporated company which is a wholly owned subsidiary of China-ASEAN Investment Cooperation Fund (CAF). CAF is a private equity fund sponsored by the China Export-Import Bank.
Under the agreement, Nenaco will purchase all of the Aboitiz family?s interests in the transport sector, except the interests it co-owns with the Jebsen Group of Norway.
AEV will acquire prior to closing the 62.5 percent equity stake of ATS in the ship management, manning and crew management, and bulk transport businesses of the Aboitiz Jebsen group for approximately P355.91 million.
Likewise, ACO will acquire ATS? 50 percent equity in Aboitiz Jebsen?s chartering business for P44 million.
?The buyout is expected to close on or before January 10, 2011,? AEV said.
?The divestment of ATS was a very difficult decision to make considering the Aboitiz group has been in the transport business for over 100 years,? AEV president and CEO Erramon Aboitiz said.
He said the company plans to use the money for the expansion of its banking and energy businesses.