LT Group bolsters stake in VMC via P660-M deal

Conglomerate LT Group Inc. through its subsidiary Tanduay Holdings Inc. bought 131,863,677 shares or approximately 4.5 percent of the total outstanding and issued shares of Victorias Milling Corp.(VMC) worth P660 million.

The shares were sold by Hong Kong-based First Pacific Co. Ltd.

First Pacific said in a statement it agreed to dispose 14.8 percent shareholding in VMC in two transactions totaling P2.16 billion.

First Pacific said VMC acquired 300 million shares while the second buyer, the LT Group, through its subsidiary, has acquired a total of about 131.9 million shares.

LT Group, through the deal, had raised its stake in VMC by 4.5 percent to 28.1 percent.

Before the deal, Tanduay Holdings owned a 23.6-percent interest in the sugar milling firm.

Despite the divestment in VMC, First Pacific said it remains remains committed to the local sugar industry through its investment in Roxas Holdings Inc. (RHI), another leading sugar and ethanol producer also listed on the Philippine Stock Exchange (PSE).

The Securities And Exchange Commission (SEC) approved VMC’s application for an increase in authorized capital stock last Nov./ 11.

The directors of VMC informed the PSE that on Sept. 24, 2015, the Amended Article of Incorporation of VMC was approved by the majority of its directors. VMC also disclosed that the stockholders representing two-thirds of VMC outstanding capital stock approved the amendment in a meeting held on Feb. 7, 2012.

The amendment refers to the Article VII to reflect the increase in authorized capital stock from P2.6 billion divided into 2.6 billion shares with par value of P1 per share to P2.9 billion divided into 2.9 billion shares with par value of P1 per share.

VMC also repurchased 365 million common shares to enhance shareholder value by increasing earnings per share to about 42 cents from 34 cents according to its disclosure.

“Management constantly pursues ways to enhance shareholder value not only by continuing excellence in operations but also by cutting costs as highlighted in this year’s net income surpassing the P1-billion mark, a record in VMC’s 97-year existence,” according to its disclosure.

“The stock repurchase sends a strong signal that management believes that the future of the company continues to be bright, so much so that it is willing to invest in itself. The company further says that the funds allocated for this program are sufficient after considering this crop year’s capital expenditures and cash receipts from operations,” VMC reported.

In the last three years, VMC has embarked on a program to pre-pay all loan obligations under the rehabilitation plan approved by the SEC. On May 31, 2013, VMC has already fully paid in advance its restructured loans in the amount of P4.4 billion. VMC has already fully redeemed the convertible notes in the hands of its original noteholders.

The sale agreement has already been executed and VMC has acquired 300 million shares from First Agri Holdings Corporation and Hargate Investments Limited on Feb. 18, 2016. RIZA LOZADA