MANILA, Philippines – The holding company of the Roxas group has sold a portion of its holdings in its sugar milling arm to Hong Kong-based First Pacific Company Ltd. (FPIL) , a move seen to prepare its sugar business for the ASEAN economic integration in 2015.
In a statement, Roxas and Company Inc. (RCI) announced that it has sold a 31-percent stake of its 66 percent share in sugar miller Roxas Holdings Inc. for (RHI) P2.23 billion at P8 per share.
Pedro E. Roxas, the executive chairman of RCI and RHI, said the equity sale “ends the sugar group’s long search for a strategic partner and will accelerate RHI’s plan to be the dominant sugar company in the Philippines.”
“This partnership of RHI with First Pacific, a leading global player, will strengthen RHI and prepare it for the industry consolidation that will take place with the advent of the ASEAN integration in 2015,” added RHI president & CEO Renato C. Valencia.
After the share sale, RCI would remain a major shareholder in RHI with a 35 percent ownership and will share management of the company with First Pacific which would hold 34 percent ownership as it acquires additional ownership from minor shareholders.
Minority shareholder would hold a combine 31 percent of RCI.
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RCI said it would use the proceeds to realign its core shareholders, strengthen its balance sheet, and finance projects in realty, hotel and tourism which is considers as its “fastest growing business segment.”
RCI’s main holdings are raw real estate located in Nasugbu, Batangas, sugar-related assets and businesses held through RHI, and real estate development through its property arm, Roxaco Land Corporation (Roxaco).
First Pacific, led by Filipino businessman Manuel V. Pangilinan, is an investment management and holding company with operations in Asia and business interests in telecommunications, infrastructure, consumer food products and natural resources.
RHI and its subsidiaries produce raw and refined sugar in different grades.
Its sugar manufacturing subsidiaries are Central Azucarera Don Pedro, Inc. (CADPI), Central Azucarera de La Carlota, Inc. (CACI) and bioethanol producer Roxol Bioenergy Corporation (Roxol).
RHI earlier announced that it intends to carry out in the next three years strategic measures to prepare for increased global competition brought about by the reduction in tariff of sugar imports from 48 percent in 2010 to five percent in 2015 within the ASEAN region.
Filipino sugar millers are particularly threatened by the influx of cheap sugar from Thailand.