Bilyonaryo Manuel V. Pangilinan?s First Pacific group is divesting its shares in the country?s biggest sugar company, Victorias Milling Corp., for about P1.825 billion.
In a statement issued yesterday, VMC said it sold 365 million of its shares at P5 each to First Agri Holdings Corp., Hargate Investments Ltd. and Nestar Investments Ltd., all affiliated with the First Pacific group. The shares represent 12.5 percent of outstanding shares.
VMC said the stock repurchase would enhance shareholder value as the company would effectively be increasing earnings per share to 42 centavos from 34 centavos.
?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,? VMC said.
The funds allocated for the buyback program are sufficient after considering this crop year?s capital expenditures and cash receipts from operations, the sugar firm added.
The group of taipan Lucio Tan is currently the single biggest shareholder of VMC.
The First Pacific group entered the Philippine sugar industry with the acquisition of a 31 percent stake in Roxas Holdings in a deal valued at P2.23 billion.
?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 one billion peso mark, a record in VMC?s 97 year existence,? VMC said.
In the last three years, VMC has embarked on a program to pre-pay all loan obligations under the rehabilitation plan approved by the Securities and Exchange Commission.
On May 31, 2013, VMC had already fully paid in advance its restructured loans amounting to P4.4 billion.