First Pacific gets P2.16B from sale of stake in VMC

Hong Kong-based First Pacific Co. Ltd. has raised a total of P2.16 billion from the sale of a 14.8-percent stake in sugar miller and refiner Victorias Milling Co.

Notwithstanding the asset disposal, First Pacific said it remained committed to the Philippine sugar industry through its investment in Roxas Holdings Inc., a leading sugar and ethanol producer also listed on the Philippine Stock Exchange.

“We are focusing our investment in the Philippine sugar industry on RHI and preparing for its rights issue announced earlier,” First Pacific managing director Manuel Pangilinan said in a press statement on Thursday.

RHI’s board earlier approved a rights offering of common shares to all shareholders. The offer size, entitlement ratio and offer price have not been set.

In its statement, First Pacific said it had sold out of VMC in two blocks, the first of which consisted of 300 million shares bought back by VMC itself at P5 each or for a total price tag of P1.5 billion.

The Lucio Tan group, through a subsidiary, also acquired another 131.9 million shares also at P5 a share.

The Lucio Tan and First Pacific groups both scrambled for additional shares in VMC in previous years. While the Lucio Tan group was the controlling shareholder for many years through shares held by Tanduay Holdings and Philippine National Bank, Pangilinan’s group gained interest in recent years, seen in line with First Pacific’s thrust to invest in agribusiness.

VMC was one of the first companies to seek debt relief during the Asian currency crisis but it was able to turn around using a creditor-driven rehabilitation framework. Its shares resumed trading on the PSE in May 2012, ending the lack of liquidity and attracting new investors.

In the last three years, VMC embarked on a program to pay ahead of maturity all loan obligations under the rehabilitation plan approved by the Securities and Exchange Commission. On May 31, 2013, VMC fully paid in advance its restructured loans amounting to P4.4 billion. VMC has also fully redeemed the convertible notes in the hands of its original noteholders.