Filinvest acquires Pacific Sugar in share swap

Filinvest Development Corp., the holding company of the Gotianun family, has acquired a sugar business, its first major branching out from real estate development. In a statement to the Philippine Stock Exchange, FDC said its board of directors approved the acquisition of Pacific Sugar Holdings Corp. from ALG Holdings Corp., its parent company, in exchange for 1.55 million of its shares. The share swap will give FDC 100 percent control of PSHC, one of the major sugar producers in the country on Monday, through its wholly-owned sugar milling subsidiaries Cotabato Sugar Central Co. Inc. and Davao Sugar central Co. FDC will also gain control of High Yield Sugar Farms Inc., one of the major sugar planters in Mindanao. "The swap and the infusion of the sugar business into FDC, will place the company in a position to capitalize on the productive sugar industry in an area with vast expansion potential and the opportunity to venture into allied businesses such as alternative fuel production and power co-generation," FDC president Josephine Gotianun Yap said. PSHC owns and manages two sugar mills with a combined milling capacity of 9,000 tons per day. Its expansion program will increase its daily capacity to 15,000 tons, giving it the second largest combined milling capacity in Mindanao. PSHC currently operates one refinery with a 6,000-bag daily capacity. After its on-going expansion in Davao and the completion of its second refinery by the first quarter of 2008, the two refineries combined will have a daily capacity of 20,500 bags, one of the biggest refining capacities in the country. The valuation of PSHC’s sugar operations was performed by Manabat Sanagustin & Co., a member of the KPMG network and a reputable, independent, third-party financial advisor. Using the minimum valuation provided by the financial advisor and an imputed exchange value of P10 per share, ALG will receive 1.55 billion FDC shares. This translates into a discount of 30.8 percent to the independent valuation of the three companies, or a 44.5-percent premium over FDC’s 15-day volume weighted average price (June 7 to 28) of P6.05 per share. - GMANews.TV