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Biz Buzz: Sugar showdown

/ 04:28 AM April 07, 2014

The group of businessman Manuel V. Pangilinan was seen in a huddle with folks from the Ty-led Metrobank group at the Meralco office in Ortigas sometime last week. It’s no longer a secret, of course, that MVP’s group is interested in the country’s largest sugar firm Victorias Milling Corp. and may soon gain a foothold beginning with the small but significant stake held by the Metrobank group.

But now that VMC is on the radar of an influential new investor group, which has long declared investing in commodities as part of its strategy, the Lucio Tan group (which previously appeared uninterested in consolidating control of the sugar firm) seems to have shifted from being nonchalant to defensive.

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Although the shares committed to MVP may still be just a token compared to the stake held by Kapitan’s group in VMC, it seems enough to jolt the taipan’s group. Industry sources said that apart from trades attributable to MVP’s allies, Kapitan’s group has been recently seen also buying more VMC shares on the board.

MVP’s group has long been rumored to be in talks to buy out the interest held by creditor-banks in VMC but it was only recently that the group started making any actual move on the sugar firm.

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Kapitan’s group is a significant shareholder through Philippine National Bank and Tanduay Distillers (with a combined interest of 16 percent) but is believed to be in alliance with other voting blocks for an estimated total control of about 30 percent.

If and when MVP’s group gains a foothold in VMC beginning with the Metrobank group’s 7-percent stake, this still leaves 63 percent of shares that could be free for all.

As for the British Virgin Island-based firm Premier Network International Ltd. that earlier acquired a 24-percent stake in VMC and thus became its single-largest stockholder, this block has neither sought management control of the company nor declared affiliation with Kapitan’s group. Whether this group is already an ally of any group jockeying for more shares in VMC or one that will flip to the best bidder remains to be seen.—Doris C. Dumlao

Best CEOs

Several Philippine blue chip companies led by the Manuel V. Pangilinan, SM and Aboitiz groups were feted at the 4th Asian Excellence Recognition Awards held Thursday last week at the Renaissance Harbour View Hotel in Hong Kong.

From the MVP group, among the awardees for Asia’s “best CEO” for investor relations were Meralco’s Oscar Reyes, Metro Pacific Investment Corp.’s Jose Ma. Lim and PLDT’s Napoleon Nazareno. Likewise in this lineup of best CEOs were Erramon Aboitiz of the Aboitiz group, Teresita Sy-Coson of BDO Unibank, Enrique Razon of International Container Terminal Services Inc., Andrew Tan of Megaworld Corp., Alberto Villarosa of Security Bank, Hans Sy of SM Prime Holdings and Hans Sicat of the Philippine Stock Exchange.

For best chief finance officers, Meralco’s Betty Siy Yap and MPIC’s David Nicol were among the winners. Joining the ranks of the “best CFOs” are Iker Aboitiz of Aboitiz Power, Pedro Florescio III of BDO Unibank and Jeffrey Lim of SM Prime.

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These awards were given by Corporate Governance Asia and were based on scores from submissions and interviews conducted with investors. They were given to people who “possess strong leadership in guiding the board of directors and the company management in growing or expanding the business, and at the same time uphold the highest ethics in business practices.”

For the corporate awards ranging from best in corporate social responsibility, corporate communications and investor relations, Team Philippine racked up a total of 27 awards, out of which the SM group brought home 10 while the MVP group bagged nine. The Aboitiz group got three awards, ICTSI and Megaworld got two each and Security Bank brought home one.

Corporate Governance Asia is a quarterly journal that provides news and analysis on corporate governance issues, boardroom practices and shareholder activism.

Sicat is the first among the recently awarded CEOs to express gratitude for this recognition, saying the award was “a testament to how seriously we take corporate governance as a listed company and as an exchange.”—Doris C. Dumlao

Steel industry champion

After months of trying to catch the attention of national authorities, the local steel industry—at least its members who are legitimate players—has finally found a champion in the person of Sen. Bam Aquino.

We understand that the neophyte senator is now convinced that the proliferation of substandard steel products has magnified the number of casualties in recent disasters. As such, he has called a public inquiry into the matter through a Senate hearing scheduled Monday.

Senator Aquino was supposedly convinced during a recent visit to Bohol where he saw structures either completely leveled or still standing despite being just meters apart. This could only be attributed to one house having been built using inferior steel reinforcement bars, he concluded.

Indeed, shortly after the Bohol quake, the Philippine Iron and Steel Institute (PISI) sent experts to examine the collapsed structures. They found out that many of the more severely damaged structures used inferior steel products.

Expect the senator to train the spotlight on the port of Cebu, which has long been notorious as an entry point for smuggled inferior steel products, mainly from China. But the proliferation of inferior steel products are not due to smuggling alone. Inferior products seized in recent raids included certified but substandard, as well as uncertified items.

A recent raid conducted by authorities in Caloocan City yielded supposedly inferior steel products allegedly with markings from manufacturers like Cathay Pacific Steel Corp., Continental Steel Manufacturing Corp., Dragon Asia Metal Corp., Mackay Industrial Corp. and Somico Steel Mill Corp.

Expect the senator to put some officials from steel manufacturing firms on the hot seat because of this.—Daxim L. Lucas

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TAGS: 4th Asian Excellence Recognition Awards, awards and prizez, CEOs, Philippines, steel industry, sugar, Victorias Milling Corp.
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