VMC puts up P500-M unit

Sugar miller Victorias Milling Corp. is setting up a P500-million subsidiary that will set in motion plans to undertake power-related projects.

In a disclosure to the Philippine Stock Exchange Monday, VMC said its board of directors approved a plan to set up the wholly owned subsidiary.

A few years ago, VMC amended its bylaws to make room for diversification into allied businesses to strengthen operations ahead of a low-tariff regime under the Asean Free Trade Area (Afta).

For a purely commodities company like VMC, diversification into power co-generation is seen as a natural step to help stabilize demand for sugar.

VMC has also obtained consent from its shareholders and the Securities and Exchange Commission (SEC) to amend its secondary purpose under the charter to allow the co-generation of electricity for its own use for lighting and other purposes.

In addition to the leeway under its existing charter to go into manufacturing, agricultural, educational, mercantile, insurance, trading, real estate and fiduciary businesses, more amendments were made to include infrastructure, transportation, telecommunications, mining, water, power generation, recreation, financial or credit and consultancy.

Industry sources said VMC was now undertaking an internal study to study its future venture into co-generation but creating a new subsidiary devoted entirely to this was seen needed to allow the parent firm to focus on the core sugar business.

The new subsidiary will also be tasked with securing requirements from regulatory bodies such as the Department of Energy and the Energy Regulatory Commission in the future.

VMC also disclosed yesterday the list of nominees to its board of directors for the fiscal year 2015-16 to be elected at the Feb. 3 annual stockholders’ meeting. Two in the list are from the group of businessman Manuel V. Pangilinan—Pangilinan himself and Ray Espinosa.

There are 14 nominees to the 11-member VMC board nominated by existing shareholders or creditors. The disclosure noted that with respect to Espinosa and Pangilinan, their nominations under the category of existing stockholders would be subject to confirmation from the SEC.