Yuchengco Group buys MIT for P975 M

The Yuchengco Group has acquired in full the Intramuros-based Mapua Institute of Technology for P975 million, a disclosure statement to the Philippine Stock Exchange said.

The school's ownership will be handed over to Petrofield's Corp., the oil exploration subsidiary of the Yuchengco Group of Companies. Company officials said they have decided against incorporating a separate unit because of "financial and operational inefficiency which can come about by adding another layer in the ownership structure."

The Yuchengco's umbrella investment holding company, the Pan Malayan Management and Investment Corp., has substantial interests in a wide mix of industries: banking and financial services, manufacturing, construction and real estate, agriculture, fastfood, mining and oil exploration.

Among these are leading universal bank RCBC, life insurer Great Pacific Life, non-life insurer leader Malayan Insurance, and automotive makers Isuzu Philippines and Honda Cars. Moreover, the publicly-listed House of Investments holds interests in Philippine Fuji Xerox, engineering and construction firm EEI Corp., memorial park developer Manila Memorial Park, horizontal construction company Philrock Inc., and savings bank BA Savings Bank.

Under the terms, HI will infuse P250 million in Petrofields as deposit for future subscription. The balance of P725 million will be funded partly by proceeds from the stock rights offering to Petrofields shareholders and through loans from banks with MIT shares as collateral.

Petrofields completed the payment of P250 million on Dec. 21, 1999 and by July this year, the remaining P725 million, covered by irrevocable letters of credit (L/Cs), will be paid to MIT shareholders.

HI and Petrofields officials have informed the PSE as early as the first week of December last year that a share purchase agreement has been reached between them and MIT stockholders for the purchase of the school's entire outstanding capital stock.

The entry of MIT into the Yuchengco camp opens up a possible money-making venture, particularly with MIT's strong hold on the much sought-after technology and engineering courses.

Because of this niche market, MIT is also a potential candidate for stock listing, following Centro Escolar University and Far Eastern University. Another college, computer education pioneer Systems Technology Institute, has expressed interest in undertaking an initial public offering (IPO) within the next two years.

The Yuchengco group, through the AY Foundation (named after the family patriach Ambassador Alfonso T. Yuchengco), has since 1970 been actively sponsoring scholarships for children of the group's employees, street children and ethnic groups.

It is also sponsoring professorial chairs in prestigious universities, as well as building grants for schools in depressed areas and other grants for the promotion of Philippine art and culture.