By Leslie D. Venzon
MANILA, Nov. 7 (PNA) — Liquor firm Emperador Inc., a subsidiary of conglomerate Alliance Global Group Inc. (AGI), is selling about a 12-percent stake to GIC, Singapore’s sovereign wealth fund, that can raise up to Php22 billion.
In a disclosure to the Philippine Stock Exchange, Emperador said GIC would initially invest Php17.6 billion in equity and equity-linked securities (ELS) of the company at Php11 per share.
The investment comprises an equity of Php12.32 billion for the purchase of 1.12 billion common shares representing 6.95-percent direct equity stake in Emperador.
The remaining Php5.28 billion will be used to acquire equity-linked securities of the company. These have a term of up to seven years and convertible into 480 million common shares of Emperador.
Emperador said the equivalent equity ownership of GIC would be 9.64 percent if the ELS were converted into common shares.
GIC will also have an option to invest an additional Php4.4 billion in Emperador at Php11 per share over a 13-month period.
If the sovereign wealth fund undertake such additional investments, its effective ownership in Emperador under the agreement will be increased to 11.76 percent.
“The definitive (purchase) agreement is expected to be completed within November 2014,” the company said.
UBS AG acted as financial adviser of Emperador in the transaction.
Company chairman Dr. Andrew L. Tan welcomed the entry of a reputable world-class global fund manager into Emperador.
“EMP has a strong capital position and the transaction is a partnership with a long-term and like-minded investor. The partnership enhances AGI’s track record of growing companies into market leaders through strong execution, brand building and product innovation,” he said.
Emperador is the largest spirits company in the Philippines and the world’s biggest brandy producer.
In 2013, it sold approximately 33 million cases of brandy, cornering close to 50 percent of total spirits volume in the Philippines. (PNA)