RHI sets P1.1-B rights offering

Roxas Holdings Inc., a listed sugar company controlled by the group of businessman Manuel V. Pangilinan, got the go-ahead to proceed with a P1.1-billion rights offering, which was aimed at paying down its debts and expanding its business.

In a stock exchange filing Thursday, Roxas Holdings said the final offer price was set at P4.19 per share, a discount of 8.1 percent from its previous close on April 27.

The entitlement ratio is 1:4.33, which means shareholders can subscribe to a rights share for every 4.33 common shares held.

The company is offering a total of 265.97 million shares on May 12 to 18 this year, the disclosure showed.

It said net proceeds of the offer would be used to pay the loans  of Roxas Pacific Bioenergy Corp., a wholly owned subsidiary.

The proceeds of the said loan were used by RPBC to partially finance its acquisition of San Carlos Bioenergy Inc. in April 2015.

Also, the company plans to acquire an 8-megawatt steam turbine generator for sugar milling and refining. It likewise plans to install a heavy-duty pressure feeder to the sugar plant milling equipment.

Roxas Holdings earlier said it would set aside P1.4 billion for capital spending, double the budget earlier set. Of this, P600 million would be used for the ethanol business and P800 million for the sugar business.

It said it wanted to improve operational performance, cost efficiency and cane supply.

Roxas Holdings is controlled by Pangilinan-led First Pacific Co. Ltd., which earlier raised P2.16 billion from the sale of a 14.8-percent stake in Roxas Holdings’ rival sugar miller and refiner, Victorias Milling Co.

Roxas Holdings posted a P125-million net loss in the first quarter of its fiscal year ending December 2015, compared to a profit of P9 million in the same period in the previous year.

Group chair Pedro E. Roxas said earnings suffered from the combined impact of insufficient cane supply, late startup in its Batangas plant and a temporary shutdown for needed operational enhancements in its newly acquired plant.

The combined gross profit of Central Azucarera de la Carlota, Inc. (CACI) and Roxol Bioenergy Corporation (RBC)—both in La Carlota City in Negros Occidental—was not sufficient to carry the group’s total expenses for the period, the company said in a previous statement.

Roxas Holdings president and CEO Hubert Tubio said this was a temporary setback and its outlook was still positive, “resulting in an anticipated increase in core net income in the 2016 crop year versus last year.”