URC can acquire Roxas Holdings’ assets

THE Philippine Competition Commission (PCC) has given its green light for Universal Robina Corp.’s (URC) acquisition of Roxas Holdings Inc.’s (RHI) sugar mill, ethanol plant and other investment properties in La Carlota City, Negros Occidental.

Both listed firms said in separate disclosures on Monday that they were notified of the PCC’s approval of their proposed sale transaction.

In its Sept. 3, 2020 decision, the PCC stated “the proposed acquisition by URC of assets in La Carlota and Roxol, and shares in Najalin will not likely result in substantial lessening of competition in the markets for the provision of sugar cane milling services and tolling services in Negros Island, as well as the national markets for bioethanol, the sale of raw sugar sold in wholesale, and the sale of molasses to traders.”

Following the antitrust body’s decision, Roxas Holdings said “the parties to the transaction shall aim to secure the other closing conditions, as may be applicable, and shall work towards closing the asset sale transaction at the soonest possible time.”

Early in June, the two companies announced the transaction covering all buildings, improvements, machineries and equipment, laboratory equipment, as well as the land on which these plant and buildings are located and investment properties essential for the continuing operations of the mill and ethanol plants located at La Carlota City.

Roxas Holdings had said proceeds from the asset sale would be used to prepay all long-term debt and reduce short-term debt to levels sufficient for its working capital needs.

The sale the La Carlota assets would also enable the company to refocus on rebuilding its resources, including the sugarmilling and refining facilities in Nasugbu, Batangas.

“The paring down of existing debts is expected to result in a stronger balance sheet for the RHI Group, and in capacity to rebuild its operations in Nasugbu, Batangas,” it added.

For its part, URC said aside from the operational synergies that will be achieved between La Carlota and existing URC operations in sugar, the deal is also intended to help sugarcane planters increase their productivity, as well as help local communities in Negros Occidental by providing more opportunities.

“In addition, the acquisition will allow URC to continue in its efforts to support the development of the sugar industry in the Philippines,” it said.

URC shares gained P1.10 or 0.79 percent to end at P140 apiece while RHI shares rose by 22 centavos or 12.79 percent to close at P1.94 each on Monday.