URC buying Roxas Holdings’ Batangas sugar operations

Universal Robina Corporation (URC) is acquiring the sugar milling and refining operations of Roxas Holdings, Inc. (RHI) and wholly-owned subsidiary Central Azucarera Don Pedro, Inc. (CADPI) in Brgy. Lumbangan, Nasugbu Batangas.

In a disclosure to the Philippine Stock Exchange, RHI said they have reached an agreement with URC but the consummation of the Sale Transaction is subject to satisfactory completion of certain conditions, including the approvals of the Philippine Competition Commission (PCC) and creditor banks.

“We are hopeful that we can get the necessary approvals before the start of the next Crop Year,” RHI Chairman Pedro Roxas said. The sale of the asset is intended to help the group reduce debt.

He said “we believe that the Sale Transaction will bring about significant improvements in the sugar industry in Batangas for the benefit of all stakeholders – farmers, community, employees and mill alike.”

Total raw sugar production in Batangas is around 3 million 50-kg bags, or roughly 6 percent of total annual national sugar production.

RHI President Hubert D. Tubio said that the sale of our Nasugbu sugar milling and refining facilities will allow them to focus on RHI’s operations in Negros.

“We have significantly improved and grown the operations of our sugar milling plant and two ethanol production plants in Negros over the last two Crop Years and we hope to further enhance our operations after the Sale Transaction,” he said.

RHI Executive Vice President Celso T. Dimarucut said that the Sale Transaction will significantly reduce the Group’s leverage as proceeds will be used to pare down debt.

“We will prepay all long- term debt and reduce short-term debt to levels sufficient for our working capital needs,” he said.

Dimarucut added that, “our strengthened balance sheet will enable us to be more agile in responding to changing market conditions and will give us the flexibility to pursue opportunities to grow at a much faster pace.”