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FILINVEST Development Corp. (FDC) said it will
venture into ethanol production as part of its diversification
strategy following the purchase of a sugar company this year.
During a special stockholders
meeting, Josephine Yap, FDC president, said the holding firm of the
Filinvest Group bought 100 percent of Pacific Sugar Holdings Corp. (PSHC)
to “capitalize on the opportunities” in the sugar industry.
FDC’s stockholders approved the
acquisition of PSHC, which owns Cotabato Sugar Central Co., Davao
Sugar Central Co., and High Yield Sugar Farms Inc., through an
agreement with ALG Holdings and the share swap the transaction
entailed.
Under the agreement signed on
June 29, ALG Holdings received P1.55- billion worth of FDC common
shares in exchange for 9.999 million common shares in ALG with an
assumed value of P10 per FDC share.
Manabat Sanagustin & Co.
valued the sugar business from P15.5 billion to P29.2 billion.
Besides sugar production, FDC can
grow through allied businesses like alternative fuels production,
specifically production of ethanol from molasses, and power
co-generation, Yap said.
Presently, the firm is conducting
the final study as to the size and capacity of the ethanol plants
that would be put up in Mindanao, where the sugar mills are located.
Yap said ethanol production may range from 60 to 120 liters a day.
Construction of the ethanol plant
will start on 2008 and is expected to be finished in 2009.
The plan to co-generate power
would make the sugar mills and future ethanol plants self-sufficient
in terms of their electricity needs.
To fund the ethanol project, FDC
will sell up to 3.5 billion shares, with an option to issue
convertible bonds. Total proceeds could not yet be determined .
--Likha C. Cuevas-Miel
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