Landbank takes 36% stake in Reynolds

The Land Bank of the Philippines (LBP) has taken a 36-percent stake in aluminum manufacturing firm Reynolds Philippines Corp. (RPC) in a debt-to-equity swap with RPC’s single biggest stockholder Profinda Holdings Corp.

In a disclosure to the Philippine Stock Exchange, RPC treasurer and chief finance officer Jorge Navarra said LBP has presented the copies of documents last week authorizing the registration of 361,205,257 RPC shares of stock in its name.

"The said shares were previously owned by Profinda Holdings Corp. and were subject of a pledge agreement between Land Bank and PHC," Navarra said.

The transaction is valued at P54.18 million based on RPC’s last traded price of 15 centavos each.

With the share assignment, PHC effectively reduces its stake in RPC from 42.10 percent of total outstanding shares of 999.95 million. However, the holding company still has control of RPC along with its partners such as the All Asia Capital group and Japan’s Marubeni Corp.

Aside from Landbank, other government financing institutions (GFIs) holding a sizable stake in RPC are the Social Security System (2.18 percent) and the AFP Retirement and Separation Benefits System (0.29 percent).

The share transfer took place as a result of RPC’s difficulties in servicing its loans since last year. Part of its debts include almost P1 billion in commercial papers owed to Landbank, a portion of which was restructured in longer-term tenors.

RPC was established in 1954 by Reynolds International Inc. of the US mainly to manufacture and distribute aluminum sheets, foil and extruded sections used in the packaging, container, construction, appliance manufacturing and vehicle manufacturing industries.

The country’s market leader in aluminum products, the company maintains a manufacturing plant in Dasmariñas, Cavite with a rated capacity of about 20,000 metric tons annually.

Early this year, RPC and its officials were charged with price manipulation for the unusual movement of RPC shares during the May to July period last year but the case was later dismissed by the Securities and Exchange Commission after a P1-million cash settlement offer from the company.