TYCOON Andrew Tan’s liquor company Emperador Inc. has signed a partnership agreement with Singapore’s sovereign wealth fund GIC to strengthen its capital position.
In a disclosure to the Philippine Stock Exchange, Emperador said it has entered into a definitive purchase agreement with the private equity arm of GIC for an initial investment of P17.6 billion.
“We welcome the entry of GIC into Emperador. The transaction is a partnership with a long-term investor,” said Andrew L. Tan, Emperador chairman.
The definitive agreement, which will be completed within the month, gives GIC an option to invest an additional P4.4 billion at P11 per share over a 13-month period.
Under the agreement, GIC will initially invest P17.6 billion, comprising an equity investment of P12.32 billion for the purchase of 1.12 billion common shares representing a 6.95 percent direct equity stake in Emperador, and P5.28 billion equity-linked securities investment with a seven-year tenure and convertible into 480 million common shares.
If the equity-lined shares are converted into common shares, GIC will have an equity ownership of 9.64 percent in Emperador.
If GIC exercises its option to invest an additional P4.4 billion in the liquor firm, its effective ownership under the agreement will go up to 11.76 percent.
UBS AG acted as Emperador’s financial adviser in the transaction.
Emperador sold about 33 million cases of brandy last year, cornering close to 50 percent of total liquor volume in the Philippines.