Hong Kong-based First Pacific Co. Ltd., which is in talks with businessman Leandro Leviste for possible sale of its controlling stake in Roxas Holdings Inc. (RHI), will likely remain a shareholder in the sugar and ethanol firm.
First Pacific managing director Manuel Pangilinan told reporters in a recent interview the conglomerate would only get diluted in RHI, with Leviste’s group eventually taking control of the company.
“We will likely get diluted,” Pangilinan said when asked whether First Pacific would sell its entire stake in RHI to Leviste.
RHI’s major shareholders First Pacific Natural Resources Holdings BV (FPNR BV) and First Agri Holdings Corp. (FAHC) signed non-binding term sheet agreement with Leviste-led Countryside Investments Holdings Corp. (CIHC) last week.
FPNR (BV) and FAHC, wholly-owned subsidiaries of First Pacific, collectively own 62.89 percent of outstanding capital of Roxas Holdings.
The term sheet sets out, among others, indicative key terms and conditions for the proposed subscription by CIHC to RHI primary shares in tranches.
The investment agreed is expected to be completed by May 31, 2024.
To avoid market speculation, Roxas Holdings sought a nine-day trading suspension of its shares, which started on May 20.
Leviste would fund the investment from proceeds of the sale of shares in solar firm SP New Energy Corp.
First Pacific first invested in RHI 2013 when it acquired a 31-percent stake in the company for P2.23 billion, or P8 a share.
First Pacific increased its stake in the company to 50.9 percent with purchase of 241.78 million treasury shares at P7 per share or P1.7 billion in 2015.
RHI said it would use the additional capital for plant upgrades, possible mergers and/or acquisitions and diversification of its revenue and income base by expanding its ethanol business and developing power co-generation.
RHI in 2022 sold its sugar mill and ethanol facility in La Carlota City, Negros Occidental to Gongkongwei-owned Universal Robina Corp. for P4.9 billion.
It also closed down the operations of its sugar mill, including its refinery, in Batangas in February.
Leviste’s entry is expected to help RHI service its debt to avoid bankruptcy and create more and better jobs for the benefit of local farmers and former sugar industry workers.
