Iñigo Zo­bel emerges as largest San Miguel share­holder, over twice big­ger than Ra­mon Ang

The Philippine Star - - BUSINESS -

Ayala heir Iñigo Zo­bel has emerged as the largest in­di­vid­ual share­holder of the San Miguel Corp. af­ter the coun­try’s largest con­glom­er­ate de­clared a prop­erty div­i­dend and gave up its 49 per­cent cross-own­er­ship stake in San Miguel’s con­trol­ling share­holder, Top Fron­tier In­vest­ment Hold­ings Inc.

Be­cause of the div­i­dend, Zo­bel, Top Fron­tier chair­man and San Miguel di­rec­tor, has seen his own­er­ship stake in Top Fron­tier bal­loon to 60 per­cent from only 40 per­cent, ac­cord­ing to Top Fron­tier’s prospec­tus.

Top Fron­tier will be listed this morn­ing at the Philip­pine Stock Ex­change at P178 a share, valu­ing the hold­ing com­pany at P87 bil­lion, mainly through its 66 per­cent own­er­ship of the San Miguel group of com­pa­nies.

With his en­larged stake in Top Fron­tier, this means Zo­bel, 56, in­di­rectly con­trols nearly 943 mil­lion San Miguel shares, over twice more than his part­ner, San Miguel pres­i­dent Ra­mon S. Ang.

RSA, ac­cord­ing to San Miguel’s end-2013 own­er­ship re­port, con­trols about 15.5 per­cent of San Miguel through Pri­vado Hold­ings.

The San Miguel list varies with Top Fron­tier’s own ac­count that Pri­vado con­trols only a lit­tle over 11 per­cent of San Miguel.

Pri­vado Hold­ings, a lo­cal in­vest­ment hold­ing com­pany with P62.5 mil­lion paid-up cap­i­tal, is in turn 62.5 per­cent by RSA and 37.5 per­cent by San Miguel di­rec­tor Thomas A. Tan.

In ad­di­tion to Pri­vado, RSA’s fund­ing com­pany Mas­ter Year Lim­ited owns another 15 per­cent of Top Fron­tier.

This means that the San Miguel pres­i­dent, who is turn­ing 60 tomorrow, con­trols at the min­i­mum 26 per­cent of Top Fron­tier’s 66.1 per­cent own­er­ship of the San Miguel pie.

Stated another way, RSA has at his dis­posal about 408.5 mil­lion out of the 2.376 bil­lion out­stand­ing com­mon shares of San Miguel, a bloc worth about P24.5 bil­lion at Fri­day’s clos­ing price.

The for­mer car me­chanic, mean­while, not only has been the chief ar­chi­tect of the bold di­ver­si­fi­ca­tion of San Miguel into power, in­fra­struc­ture and air­line, but he has emerged as a cru­cial bankroller for Top Fron­tier’s in­vest­ments.

Mas­ter Year, a lim­ited li­a­bil­ity ex­empted com­pany in­cor­po­rated in the Cay­man Is­lands with a share cap­i­tal of $50,000 and which lists RSA as sole di­rec­tor and sole share­holder, ex­tended over P9 bil­lion in loans to Top Fron­tier be­fore its list­ing.

The bor­row­ings, used for work­ing cap­i­tal and ac­qui­si­tion of in­vest­ments in shares of stock, bear in­ter­est rang­ing from 5.78 to 5.81 per­cent that “have no def­i­nite pay­ment terms and are con­sid­ered payable upon de­mand,” Top Fron­tier said.

“Pro­fes­sional fees were in­curred for the fea­si­bil­ity stud­ies ren­dered by Mas­ter Year in re­la­tion to the com­pany’s ac­qui­si­tion and projects.”

For 2011 alone, Top Fron­tier re­ported hav­ing in­curred P1.85 bil­lion in fi­nanc­ing charges from Mas­ter Year.

Top Fron­tier also dis­closed that it had availed of a $650 mil­lion fi­nanc­ing fa­cil­ity from an uniden­ti­fied lender in June 2012, payable in June 2014 with an in­ter­est rate of LI­BOR plus a hefty 5.5 per­cent a year.

The $650-mil­lion loan is se­cured by 1.05 bil­lion of San Miguel shares out of the 1.57 bil­lion shares that Top Fron­tier owns, as well as its two bank ac­counts.

Ac­cord­ing to Punong­bayan and Araullo’s val­u­a­tion, Top Fron­tier’s dol­lar-de­nom­i­nated fa­cil­ity bal­loons by over P1.1 bil­lion for ev­ery P1 de­pre­ci­a­tion to the green­back.

In all, Top Fron­tier’s loans amounted to P40.7 bil­lion as of end-Au­gust, with its to­tal cur­rent li­a­bil­i­ties greater than its to­tal cur­rent as­sets by P41.7 bil­lion, a four-fold jump from only over P10 bil­lion as of end-2012.

Top Fron­tier re­ported earn­ing a whop­ping P185 bil­lion from its in­vest­ments in 2010, but lost P86.6 bil­lion in 2011, another P25 bil­lion in 2012 and another P51.8 bil­lion in the first eight months of 2013.

To­tal eq­uity had dwin­dled from P257 bil­lion in 2010 to P76.8 bil­lion at the end of Au­gust 2013.

Top Fron­tier re­ported hold­ing P711 mil­lion in cash as of end-Au­gust, up 250 per­cent from end-2012, mainly due to higher cash div­i­dends re­ceived from San Miguel.

With the prop­erty dis­tri­bu­tion, the San Miguel con­glom­er­ate has de-linked it­self with its ma­jor share­hold­ers, spin­ning off as well in fa­vor of Top Fron­tier the var­i­ous spec­u­la­tive min­ing busi­nesses that it had ear­lier planned to ven­ture into.

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