PHILIPPINE NEWS SERVICE — Tanduay Holdings Inc., the liquor unit of taipan Lucio Tan, is seeking to increase its control of Victorias Milling Co. Inc., a company official said yesterday.
Tanduay president Wilson Young told reporters that the company had offered to buy 170 million shares owned by Miguel J. Ossoria Pension Foundation Inc. in Victorias Milling, equivalent to 10.6 percent of the company’s equity.
Tanduay submitted a bid of P0.50 per share for the stake, which has a par value of P1 each. The foundation was named after the late Don Miguel Ossorio, who founded the company in Victorias City, Negros Occidental in 1919.
The bid is Tanduay’s third attempt to buy the shares after failing in the previous two tries.
Tan, through his Philippine National Bank, already owns a 10 percent stake in Victorias Milling. Sources said Tanduay could further increase its ownership of Victorias Milling to 33 percent if it decided to convert its P300-million loan to the company.
Tanduay in 2003 granted a P300-million loan to Victorias Milling as part of a rehabilitation plan and with an option to convert the advances into equity until April this year. Creditor-banks have taken control of Victorias Milling after the company suffered financial problems.
Young said he would personally recommend to the board the conversion of the advances due to the significant investments made by Tanduay in the company.
Other major shareholders of Victorias Milling are Deutsche Bank AG London with 15.4 percent; East West Banking Corp., 5.7 percent; Land Bank of the Philippines, 4.7 percent; Global Business Park Inc., 4.2 percent; Development Bank of the Philippines, 3.9 percent; and Metropolitan Bank and Trust Co., 3.5 percent.
Young said Victorias Milling registered a net profit of P47 million in its fiscal year ending August last year from a loss of P270 million in the previous year due to higher production.
The company hopes to post a net income of P150 million in 2007.
“Our capital expenditures in the past are now bearing fruits,” Young said.
He said he was confident the company could get out of its rehabilitation earlier than planned due to improving operations.
“Victorias rehabilitation program is for 12 years but we are positive we can get it out of rehabilitation in two to three years,” Young said.
Victorias Milling is the largest sugar mill operator in the Philippines and one of the biggest in Southeast Asia.
The company had incurred significant losses from operations, adversely affecting its financial condition and cash flow position. It later filed for corporate rehabilitation with the Securities and Exchange Commission.