3 firms keen on RHI sugar mills

Listed sugar and ethanol producer Roxas Holdings Inc. (RHI) is in talks with three companies that are interested to acquire its sugar mills in Batangas, currently valued at P6.5 billion.

The Central Azucarera Don Pedro Inc. (CADPI), which accounts for roughly 6 percent of the country’s total annual sugar output, was supposed to be bought by Universal Robina Corp., the country’s largest listed food company, but the deal was blocked by the Philippine Competition Commission over monopoly issues.

RHI CFO Celso Dimarucut said in an interview that the company was still open to selling all its refining and milling assets in CADPI as a source of working capital and to pay off part of its debts currently pegged at P11 billion.

While the executive did not disclose which companies were interested in acquiring CADPI, he said these entities were not directly involved in sugar but manufacture products “that are very close to the industry.”

According to an industry source, food and beverage conglomerate San Miguel Corp. may be one of these companies.

Dimarucut said they hoped that the company would be able to sell the assets before the company’s fiscal year ends in September.

Due diligence is expected to be finished within two months.

However, “if the price is not within the acceptable range [for RHI],” Dimarucut said the company “will continue operating CADPI since it’s still a good source of profit for us.”

During the company’s annual stockholders’ meeting on Tuesday, RHI said it ended its last fiscal year with a net income of P55 million, against the prior fiscal year of P151 million.

RHI President and CEO Hubert D. Tubio said the decrease in the company’s profit was due to lower production from its mills as the lack of irrigation continued to cripple the sugar industry.