• First Pacific has P17.8B for reinvestment

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    Emeterio Sd. Perez

    Emeterio Sd. Perez

    SINCE public investors also share from the bounty in the form of dividends distributed by Metro Pacific Investments Corp. (MPIC), Manila Electric Co. (Meralco) and Philippine Long Distance Telephone Co. (PLDT), perhaps they have only good words for Manuel V. Pangilinan, who heads the group of companies in the Philippines as the nominee of Indonesian-owned First Pacific Co. Ltd., which is based in Hong Kong

    More important, perhaps, aside from the public’s appreciation of Mr. Pangilinan, is MVP’s investment strategy for the First Pacific group. In a previous piece, I reported on the foreign group’s use of MPIC’s profits to invest in Vietnam. Instead of using its earnings which it might have generated in Hong Kong, First Pacific tapped MPIC which, in turn, had to shell out $91.88 million of its accumulated profit in the Philippines for its global expansion thrust, starting in Vietnam.

    Of course there is nothing wrong with MPIC venturing into Vietnam. After all the country, once ravaged by war, may be a better country for foreign investors than the Philippines, given the kind of leadership that the present chief occupant in Malacañang and his people have shown since their takeover of the palace on July 1, 2010.

    Back to the numbers after the interruption: If the public investors of the three listed companies which have First Pacific group as a significant stockholder greatly benefited from the dividend payouts, so did First Pacific, the parent company, and more so.

    The result of a series of computations shows that First Pacific received P17.8 billion in total dividend payments in 2014 from MPIC, Meralco and PLDT. Minus MPIC’s P4 billion infusion into a Vietnamese company, the HK group would be left with a cash hoard of about P13.7 billion. Where would First Pacific spend its billions that do not even include yet the P894.8 million proceeds from MPIC’s recent sale of 196.6 million shares, or 7.7 percent, in Victorias Milling Co. (VMC), at P4.55 per share?

    Well, there is another company waiting for First Pacific. VMC needs so much in new money to maintain its profitability. After all, the Indonesians have so much stake in the sugar central for them to abandon the company. First Pacific’s people, led by Mr. Pangilinan, know where to put their money such that if VMC is not one of their investment choices, why would two First Pacific Co. remain invested in it?

    On Dec. 23, 2014, FP Natural Resources Ltd. (FPNRL) ended up owning 235.2 million VMC shares, or 9.2 percent, after buying out two corporate stockholders—Hargate Investments Ltd., which held 118 million VMC shares, or 4.6 percent; and Nestar Investments Ltd., with 117.2 million VMC shares, or 4.6 percent.

    Also on December 23, 2014, First Agri Holdings Corp. (FAHC) bought 196.6 million VMC shares, or 7.7 percent, at P4.55 per share, from Metro Pacific Holdings Inc. Filings posted on the website of the Philippine Stock Exchange showed that the two companies belong to the First Pacific group and own a total of 431.9 million VMC shares, or 16.85 percent.

    Incidentally, FPNRL and FAHC have a common set of executives, namely MVP as chairman and president; and Ray Espinosa, Jose Jesus Laurel, Jose Ma. Lim and Alex Erlito Fider, all members of the board. Lim and Fider are also treasurer and corporate secretary, respectively. This should tell the public that they may be right in monitoring where MVP goes with the Indonesians’ money.

    First Agri Holdings and FP Natural Resources may be the latest corporate vehicles tapped by First Pacific companies to invest in the Philippines. But credit is due Mr. Pangilinan, who definitely knows how to maximize utilization of the resources of the HK group’s local assets. Lately, it has expanded its participation in Roxas Holdings Inc. (RHI) from 34 percent to probably 65 percent.

    MPIC’s control of RHI is only Due Diligencer’s guess based on an incomplete disclosure. In a filing, RHI had this to say: Consequently, the Parent Company has lost its control over RHI with the dilution of its equity interest from 65 percent to 35 percent. This would mean Roxas & Co. owned 318.3 million of RHI’s 909.5 million outstanding shares and the majority group owned 591.2 million shares, or 65 percent. The big question is who owns the majority?

    esdperez@gmail.com

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