Arran Investment Pte. Ltd., an affiliate of Singapore sovereign wealth fund GIC Pte. Ltd., has completed its P22 billion investment in the Andrew Tan-led Emperador Inc.
In a disclosure to the Philippine Stock Exchange (PSE), liquor firm Emperador said, “Arran Investment Private Limited, an affiliate of GIC Private Ltd., Singapore’s sovereign wealth fund, has completed today its initial investment in Emperador of P17.6 billion comprising the purchase of common shares and equity-linked securities convertible to common shares and an option to invest additional amount of P4.4 billion.”
Emperador said this was in line with its definitive agreement with the Singaporean wealth fund in November to capture certain interests in Emperador. The completed transaction has given Arran a total stake of 11.76 percent in Emperador, including the additional investment option.
Under the agreement, GIC, through Arran Investment, offered to purchase equity and equity-linked securities of Emperador at P11 per share over a 13-month period. The initial investment was at P17.6 billion, with an option to buy additional interest worth P4.4 billion.
The initial P17.6 billion was composed of P12.32 billion equity investment for 1.12 billion common shares representing 6.95 percent of Emperador, and an equity-linked investment of P5.28 billion for 480 million common shares with a term of up to seven years.
The initial investment would have given GIC a 9.64-percent interest in Emperador, but since the additional option was exercised, GIC — through Arran Investment – now has an 11.76 percent holding in the Tan-led liquor company.
“We welcome the entry of GIC, a reputable world-class global fund manager, into Emperador. Emperador has a strong capital position and the transaction is a partnership with a long-term and like-minded investor. The partnership enhances Alliance Global Group’s track record of growing companies into market leaders through strong execution, brand building and product innovation,” said Andrew L. Tan, Emperador chairman.
UBS AG acted as financial adviser of Emperador in the transaction.
Emperador, through its operating unit Emperador Distillers Inc., earlier said that it aims to double its net income by 2016 to 2017 from the P5.8 billion recorded in 2013, adding it will be driven by domestic and global expansion of its liquor business.
Operation of the 500-hectare technologically advanced vineyard in Toledo, Spain by Emperador’s Spain-based subsidiary Grupo Emperador Spain, S.A., which is expected to raise grape produce by 500 percent annually, is part of its international expansion efforts.
The 500-hectare Toledo vineyard is part of the more than one thousand hectares of prime vineyard land in Spain that Emperador acquired for P5.8 billion in August last year.
Besides the Spain expansion, Emperador also sees expansion Vietnam market with the launching of Emperador Deluxe this year.
In the first nine months of the year, Emperador’s net income went up slightly to P4.57 billion from P4.49 billion last year even as revenues dipped to P19.56 billion from P19.73 billion a year earlier.
Emperador is 87.55-percent owned by Tan’s holding firm Alliance Global Group Inc. (AGI). AGI also has interests in property development (Megaworld Corp.); quick-service restaurants via the McDonald’s franchise (Golden Arches Development Corp.); and integrated tourism development businesses via Resorts World Manila and Resorts World Bayshore (Travellers International Hotel Group Inc.).