Premier Network buys into Victorias Milling

British Virgin Island-based firm Premier Network International Ltd. has acquired a 24-percent stake in Victorias Milling Corp., becoming the sugar firm’s single largest stockholder.

VMC disclosed to the Philippine Stock Exchange on Tuesday that Premier Network had acquired 484.67 million shares of the sugar milling company.

This block was acquired by Premier in late December from CVI GVF Lux Masters, another foreign firm, a significant but passive investor in VMC since the mid-2000s.

Premier bought the stake in VMC, which resumed trading in the local stock exchange in May last year, at P1 per share.

VMC chairman Wilson Young said Tuesday the buyer was not affiliated with the Lucio Tan group of companies, which has a 16-percent interest in the sugar firm through Philippine National Bank and Tanduay Distillers Inc.  The Lucio Tan group is the second-biggest voting block in VMC next to the new investor group.

Young said the existing shareholders of VMC had yet to meet the representatives of the new investor group. He said the entry of the new group would not likely result in the overhaul of the VMC board. Although stockholders of the company in their meeting on Feb. 5 will elect a new board for the next term, the nomination period is over.

VMC has been undergoing a creditor-driven rehabilitation program. It expects to slash its debt stock by about P1.27 billion by retiring some obligations ahead of maturity and converting some debt notes into equity.

In late December, VMC’s board approved the conversion of about P272.86 million convertible notes into equity and the prepayment of P1 billion in restructured loans in line with the debt restructuring agreements with creditors.

Some P272.86 million debt notes will be converted into equity equivalent to 272.86 million shares. With the additional shares, VMC’s total issued and outstanding capital will be 2.297 billion, it said in the disclosure. In the meantime, the company will prepay P1 billion in debt on Jan 15.

By addressing P1.27 billion worth of debt, VMC’s total debt stock is estimated to go down to about P2.2 billion, half of which represents the remaining convertible notes and the other half will be the restructured loans.

Every year until the notes fall due in 2018, holders of VMC’s debt notes have the option to convert their exposure into equity.