FIRST Pacific group is taking a controlling interest in Roxas Holdings Inc. (RHI) with the purchase of 241.78 million treasury shares worth a total of P1.7 billion, which will raise its stake in the sugar miller from 35 percent currently to 50.9 percent.
RHI said it has agreed to sell some of its treasury shares to Pangilinan-led First Pacific group in line with its expansion plans by taking in strategic investors amid the tightening competition in the sugar manufacturing sector.
In a disclosure to the stock exchange, RHI said its board of directors approved the sale of 241.78 million treasury shares priced at P7 each to First Agri Holdings Corp., an affiliate of First Pacific Natural Resources Holdings BV (FPRH).
FPRH is a subsidiary of Hong Kong-listed First Pacific Co. Ltd. led by business magnate Manuel Pangilinan.
The First Pacific group, through FPRH, already has 31 percent stake in RHI after acquiring 31 percent interest from its parent firm Roxas and Company Inc. and 4 percent stake from minority shareholders.
RHI earlier said it was looking for a strategic investor to partner with amid the growing competition in the industry brought about by the Asean Economic Community integration.
With the P1.7 billion equity sale, First Pacific’s interest in RHI increased to 50.9 percent from 35 percent.
Parent firm Roxas and Company Inc. also increased its investment in RHI, buying 33.1 million shares valued at P232 million, to maintain a 30 percent minority interest in the sugar miller.
RHI chairman Pedro E. Roxas said the company will use the fresh funds for plant upgrades, possible mergers and/or acquisitions, and to diversify its revenue and income base by expanding its ethanol business and developing power co-generation.
“FP [First Pacific] and RHI will continue to work for the consolidation of the industry in order for it to survive. We need to immediately bring plant utilization and efficiencies up,” Roxas said.
Incorporated in 1927, RHI is the third-biggest sugar refiner in the country, having an ethanol plant in Negros Occidental and three sugar mills—one in Batangas and two in Negros Occidental. The aggregate capacity of its three sugar mills amounts to 38,500 tons of cane daily.