RHI sets stock rights offering estimated at P1B

SUGAR firm Roxas Holdings Inc., now majority-owned by the First Pacific Co. Ltd., has firmed up a stock rights offering that can raise over P1 billion in fresh capital to fund the company’s expansion program.

In a disclosure to the Philippine Stock Exchange on Monday, RHI said its board had approved an offering of 265.97 million in new common shares to its existing shareholders at an entitlement ratio of one share for every 4.33 shares held.

The offer price will be computed based on a 10 percent discount to the 90-day volume-weighted average price of RHI’s common shares listed on the PSE ending on April 27 this year. Based on this indication and current market prices, the offering can raise over P1 billion.

The offer period is targeted to start on May 12 through May 18 this year.

Net proceeds from the offer will be used by RHI to partially pay the loan obligations of Roxas Pacific Bioenergy Corp. (RPBC), a wholly-owned subsidiary of the company. The loan was in turn contracted by RPBC to partially finance its acquisition of San Carlos Bioenergy Inc. in April 2015.

The rest of the proceeds will be used to acquire an additional 8 megawatt steam turbine generator for sugar milling and refining as well as install a heavy duty pressure feeder to the sugar plant milling equipment.

This year, RHI has set aside P1.4 billion in capital spending, double the budget previously targeted. Of this amount, P600 million will be used for the ethanol business and P800 million for the sugar business.

RHI’s focus is to improve operational performance, cost efficiency and cane supply, company officials earlier said.

Controlling shareholder First Pacific – which is led by Filipino businessman Manuel V. Pangilinan – earlier raised P2.16 billion from the sale of a total of 14.8 percent stake in RHI’s rival sugar miller and refiner Victorias Milling Co.