Tan group keen on recapitalizing PNB

The Lucio Tan group plans to recapitalize banking crown jewel Philippine National Bank, grow new businesses such as healthy beverages and boost its businesses under listed conglomerate LT Group Inc. (LTG).

Whatever family business interests not folded into LTG, such as the 51-percent stake in flag carrier Philippine Airlines, are not part of the assets that the group intends to keep for the long haul, LTG president Michael Tan told reporters after the holding firm’s annual stockholders meeting on Wednesday.

Tan affirmed that the family was now talking to investors for the possible sale of its interest in PAL.

Under LTG, apart from banking, are tobacco manufacturing (Fortune Tobacco), property development (Eton Properties Philippines), beer brewery (Asia Brewery) and rum-making (Tanduay Distillers).

In April, LTG raised $920 million from a landmark equity offering that set a record as the largest initial public offering or re-IPO seen in the local market.

On the recapitalization of PNB, Tan said the group was still studying its options ahead of the implementation of the stricter capital adequacy rules based on Basel 3 in January 2014.

Subject to market conditions, he said the usual plan would be to offer new shares, with the LTG subscribing to its pro-rated shares to avoid dilution.

For Eton Properties, Tan said the plan would be to grow its recurring earnings stream by expanding the business process outsourcing-oriented property portfolio.

On the beverage business, Tan said the group was currently importing soy milk but it was considering putting up a manufacturing facility once demand hits a critical mass.

LTG is also keen on growing its beer and hard liquor businesses. In the case of Tanduay, he said this unit would soon start exporting rum to the United States.

For beer, he said the strategy would be to bring more premium products to the market as the current excise tax structure was more favorable to higher-priced products. Doris C. Dumlao