Cojuangcos sell Central Azucarera de Tarlac
MANILA, Philippines – The group of businessmen Martin Lorenzo and Fernando Cojuangco is buying controlling interest in sugar milling firm Central Azucarera de Tarlac Inc (CAT) for P1.80 billion ($41.51 million*).
Tarlac Development Corporation of the Cojuangco clan – the maternal family of President Aquino – acquired sugar mill Central Azucarera de Tarlac from its original Spanish owners in 1957 using money from the government.
The government gave the family control over the 6,000-plus hectare estate on the condition that the lands would be distributed to farmers after 10 years.
But until the April 24, 2012, Supreme Court decision, Hacienda Luisita had evaded distribution.
In a disclosure to the stock exchange, CAT said the company’s major shareholders, namely the families of Don Pedro Cojuangco and Jose Cojuangco Jr, Reyes family, Teopaco family, Aquino family, and the Lopa family have agreed to sell all their total 19.772 million shares at P91 ($2.10) per share to CAT Resources & Asset Holdings Incorporated.
Based on the filing with the Securities and Exchange Commission (SEC), CAT Resources was incorporated by Lorenzo, Cojuangco, Vigor Mendoza, Nicanor Lizares, and Fernan Victor Lukban.
Lorenzo sold his restaurant chain Pancake House to Max’s Group of Companies while Cojuangco, son of Don Pedro, is currently the vice president and chief operating officer of CAT.
The CAT Resources, which has an authorized capital stock of P80 million ($1.84 million), will conduct a tender offer to acquire the remaining shares in the company as required under the Securities Regulation Code.
The P91 per share acquisition price represents an 8.3% premium over CAT’s closing price of P84 ($1.94) on July 25.
The Philippine Stock Exchange implemented an hour-long trading suspension on CAT shares to give the public time to digest the information. At the resumption of trading, the stock price of CAT went up to close 4.88% higher at P88.10 ($2.03) a piece.
A 'bittersweet' business
Incorporated on June 19, 1927, CAT operates a sugar mill and refinery, distillery and carbon dioxide plants in Barrio San Miguel, Tarlac City. The sugar cane milled is sourced within the Tarlac district and nearby towns of Pampanga.
CAT's main products are raw and refined sugar, with the mill and refinery process also producing molasses as a by-product. The combined captive molasses are further processed in the distillery to produce alcohol.
Hong Kong’ First Pacific Company Ltd was earlier reported to be interested in acquiring CAT.
The Philippines' sugar industry has remained flattish in terms of production, businessman Manuel V. Pangilinan, First Pacific managing director and chief executive, earlier said.
In line with the coming ASEAN economic integration, Pangilinan noted that the country is not competitive against Thailand, where sugar production cost is lower because it has bigger mills and bigger farm yield than that of the Philippines. "Does that mean the Philippines should move out of the sugar business?" Pangilinan asked.
First Pacific has a 34% interest in Roxas Holdings. Roxas Company Incorporated, the holding company of the Roxas Group, sold 279 million shares in April, representing 31% of Roxas Holdings, to First Pacific Natural Resources Holdings BV for P8 ($0.18) per share in November 2013.
First Pacific also acquired additional shares from the holdings of other stockholders to increase its ownership to 34%. Roxas Holdings is the third-biggest sugar refiner in the Philippines.
Meanwhile, tycoon Lucio Tan's LT Group Incorporated (LTG) has doubled its stake in Victorias Milling Company Inc. (VMC).
In a regulatory filing in April, LTG said it raised its interest in VMC to 14.8% from 7.4%. It did not disclose the value of the transaction. The increase in LTG's VMC stake was seen as a defensive move amid reports that Pangilinan-led First Pacific group is interested in buying into VMC. – Rappler.com
*($1 = P43.38)