JAPAN Tobacco International (JTI) on Thurs-day confirmed it was in talks with Mighty Corp. regarding the sale of the local cigarette maker’s manufacturing and distribution business and assets, but clarified there was no formal agreement yet between the companies.
“We can confirm that we have entered into exclusive talks with Mighty Corp. on the sale of its cigarette manufacturing and distribution business and assets,” JTI said in a statement released on Thursday.
It declined to further elaborate on the issue until an agreement is signed.
On Wednesday, the Department of Finance revealed that Mighty offered a P25-billion settlement for its tax liabilities.
Mighty earlier said that the settlement sum would be funded by means of an “interim loan” from JTI Philippines and the sale by Mighty and its affiliates of its manufacturing and distribution business and assets, along with the intellectual property rights associated with these assets, “including those owned by the company, Wong Chu King Holdings Inc., and other affiliates to JTI or any of its affiliates for a total purchase price of P45 billion exclusive of VAT.”
Mighty’s offer was higher than the P3-billion settlement offered by President Rodrigo Duterte in March.
The Finance department said it was studying Mighty’s offer.
Three tax cases filed by the Bureau of Internal Revenue against Mighty Corp. are pending before the Department of Justice. These cases cover the firm’s non-payment of excise taxes due on its cigarette products and the use of counterfeit tax stamps on its cigarette packs, which correspond to excise taxes amounting to P37.88 billion.