Roxas firm suspends trading pending new investor
Millennial businessman Leandro Leviste has shaken the local stock market with his plan to invest P5 billion in Roxas Holdings Inc. (RHI), but the company suspended trading yesterday until the end of May to avoid speculation on the proposed bailout.
Leviste’s entry in RHI as its possible white knight pushed the company’s share price by 49.48 percent to P1.45 per piece yesterday before it asked the Philippine Stock Exchange (PSE) for a voluntary suspension of trading of its shares until May 31 to avoid speculative activities.
The listed sugar company is expected to make a decision on or before May 31 as to whether it would pursue an agreement with Leviste for his proposed investment of P5 billion in RHI.
Last week, RHI signed a non-binding term sheet with Leviste’s Countryside Investments Holdings Corp. (CIHC) and Hong Kong-listed First Pacific through its subsidiaries First Pacific Natural Resources Holdings BV (FPNR) and First Agri Holdings Corp. (FAHC).
FPNR and FAHC collectively own a total of 62.89 percent of outstanding capital of RHI.
The agreement lays out the terms and conditions for CIHC’s proposal to acquire RHI shares from the First Pacific subsidiaries.
However, RHI said Leviste’s investment in the company isn’t a done deal yet, saying the company has yet to fulfill corporate approvals and regulatory clearances, before it can enter into any transaction.
For one, RHI has to submit the proposed investment to the Philippine Competition Commission and the Securities and Exchange Commission for their respective checks.
Based on the term sheet, CIHC plans to invest P5 billion in RHI to acquire a controlling stake of 71.6 percent in the company.
For RHI, this means it can settle some of its outstanding debts to evade bankruptcy, especially as it owes P4.4 billion to the Bank of the Philippine Islands,
BDO Unibank Inc. and Land Bank of the Philippines.
RHI used to be one of the largest sugar millers in the Philippines, owning Central Azucarera Don Pedro Inc., a sugar refinery spanning 236 hectares in Nasugbu, Batangas. RHI decided to shut its sugar business in March, ending 97 years of operations as financial troubles worsened.
China Bank Capital Corp. managing director Juan Paolo Colet said RHI can start turning its fate around if it proceeds to welcome fresh capital from Leviste. He added that RHI can also benefit from Leviste’s understanding in Batangas, as he made one of his biggest bets in renewable power in the province.
“Batangas is poised for rapid economic development, and I think Leandro sees the value of RHI as a strategic platform for participating in that growth,” Colet told The STAR.