Biz Buzz: Razon’s backdoor ticket

After the sale of his interest in the national electricity superhighway, tycoon Ricky Razon is now shopping around for a listed shell company for his ventures outside of international port operator ICTSI.

We’re talking about Bloomsbury Investments, which is now building a $1.2-billion integrated casino and tourism facility at the Pagcor-initiated Entertainment City in partnership with the Las Vegas Sands group, which operates the famous Venetian casino complex.

According to the grapevine, Razon is in talks with publicly listed IPVG Corp. or some of its operating units for the backdoor-listing ticket. IPVG, after all, is undertaking a restructuring program to unlock values at the publicly listed shell company level while spinning off its technology-related businesses. This means that Razon can come in and infuse his gaming interests into IPVG.

When asked about this, IPVG president Enrique Gonzales told Biz Buzz that there was “nothing definitive as of today and if there’s anything definitive, we are required to make a disclosure the same day.”

According to the reliable grapevine, such a disclosure was coming sooner rather than later.

There was also talk that Razon was interested in IPVG’s cloud computing unit, IP Converge, but Gonzales said this business was not for sale. Meanwhile, it was the group led by another local port operator that recently closed a deal to buy into a “cloud computing” company, albeit one that’s privately held.—Doris C. Dumlao

Generous Cargill offer

Integrated agribusiness firm AgriNurture Inc. (ANI), led by young Chinoy businessman Tony Tiu, recently caught the attention of investors scouting for promising small-cap stocks. Apart from being one of the first beneficiaries of the coconut juice craze (via Vita Coco, one of the fastest-growing beverage brands in the United States) spurred by P-Noy’s recent foreign trip, ANI’s shareholders are benefiting from a generous buy-in offer made by Black River Capital Partners Fund, a unit of American agribusiness giant Cargill.

If Black River is willing to buy 28.11 percent of ANI for $30.45 million, this means that ANI was valued by the Cargill unit at around $109 million, or P4.8 billion—representing a significant premium over the local company’s current market capitalization of P2.34 billion. Black River’s investment, however, is still subject to due diligence. At the same time, no formal agreement has been executed regarding the final structure of Black River’s investment.

In general, however, Cargill is upbeat on Asia and this investment seems part of a $400-million fund earlier earmarked for companies that will benefit from rising Asian demand for meat and vegetables. Half of this fund is targeted for China but, through ANI, the Philippines is happy to get a piece of the action.—Doris C. Dumlao

Powerful consortium

Critics of government underspending notwithstanding, Public Works and Highways Secretary Rogelio “Babes” Singson has been steadily implementing reforms in his agency, including disbursement of funds for contracts.

Biz Buzz sources said Singson met last week with representatives of a consortium composed of local and foreign construction firms to inform them that they were ineligible for new government projects due to huge cost overruns in their contracts under the President’s Bridges Program since the time of FVR. These bridges were all funded by official development assistance (ODA).

Singson cited the ODA law, which stipulates that once cost overruns exceeded 10 percent, implementation of an ODA-funded project must be reviewed by the NEDA–ICC.

The consortium, which has been known for its aggressive tactics and uncanny skills in cornering government contracts through powerful connections, including—but not limited to the legislature—has incurred cost overruns in its Tulay ng Pangulo project by as much as 86.6 percent as of 2008. The cost overrun could exceed 100 percent, or double the original cost, by now, costing taxpayers billions of pesos, according to NEDA officials.

Unmindful of negative public opinion, the consortium is reportedly seeking more funding from the government while trying to snatch projects from smaller players.

When informed by Singson of his management committee’s decision, one smug consortium member merely shrugged it off and said that the matter would be raised with some members of powerful political clans in Congress. Yikes!—Daxim L. Lucas

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