Wednesday, September 24, 2008 Aboitiz to sell transport business By Nancy R. Cudis Sun.Star Staff Reporter
CONSIDERING opportunities in other industries like power, conglomerate Aboitiz Equity Ventures (AEV) decided to sell its domestic transport business and reinvest the money on other ventures that would give the company better returns.
The AEV board of directors disclosed its plan yesterday to accept the unsolicited offer of KGLI-NM Holdings Inc. to buy all of AEV’s shareholdings in Aboitiz Transport System Corp. (ATSC), subject to “a due diligence audit” by the buyer.
AEV and Aboitiz and Company Inc. (ACO), the private holding company of the Aboitiz family, will sell their combined shares in ATS on a per share purchase price to be computed based on an ATSC equity value of P5 billion or equivalent to P2.044 per share. AEV and ACO owns shares, representing 77.10 percent and 15.93 percent, respectively, of the total outstanding ATS capital stock.
“We have no intention of selling the transport business, but they (KGLI-NM) approached us and we felt that their price offer was reasonable enough that we can use to invest in other opportunities in other industries like power,” AEV chief operating officer Erramon Aboitiz said in a conference call to reporters.
He clarified that they are not looking for buyers of ATSC. The transaction between the Aboitizes and KGLI-NM, which he described as a “serious buyer with good investments in the country” and is happy with the management and professionalism of ATSC, was a “private deal” that developed after the annual AEV stockholders’ meeting last May.
He stressed that except for the joint venture businesses in ship management, manning and crew management, and bulk transport of the Aboitiz Group with the Jebsen Group of Norway, the planned acquisition would consist of all the shipping and logistics businesses of ATS, including Superferry, Supercat, and 2GO.
He said that his family has been in the transport business for over 100 years now, making it difficult for them to decide on the sale.
Good
“(But) this is a transaction that is good for everyone. It is good for the country because this would mean more investors coming in, good for the Aboitiz Transport because it will still continue to grow, and good for (our few thousand) employees because nothing will change in their positions under a new management,” he said.
Aboitiz disclosed that they have not yet identified where the proceeds of the sale will go, although he said that the group intends to re-invest in its existing businesses in power, banking, food, real estate and construction.
KGLI-NM is jointly 60 percent owned by domestic company Negros Holdings and Management Corp. and 40 percent owned by Dutch company KGL Investment BV that is beneficially owned by the Kuwaiti company KGL Investment Company.
It still has 60 days from the execution of the signed memorandum of agreement or until Nov. 22 to notify AEV and ACO whether it will proceed with the transaction.
If KGLI-NM pursues the pruchase, it will undertake a tender offer of the shares owned by the minority shareholders at the same terms offered to ACO and AEV.
Otherwise, Aboitiz said they would continue managing ATSC and grow its logistics business.
ATSC incurred a loss of P22 million for the first quarter this year due to the continuous rise of fuel prices and stiff competition from the airline industry.
However, ATSC registered total consolidated revenues of P6 billion for January to June this year or a nine percent increase from P5.5 billion in the first half of 2007.
