Metro Pacific shelves plan to sell stake in Negros Navigation

Metro Pacific Corp. (MPC) has aborted its plan to unload its controlling stake in domestic shipping line Negros Navigation Co. Inc. (Nenaco) while its only remaining non-property asset, First E-Bank, has been getting several bid offers.

MPC chairman and acting CEO Manuel Pangilinan said the company’s board has decided to withdraw a June 30, 2001 proposal to dispose of its entire 74-percent interest in Nenaco by distributing these shares as property dividends to MPC stockholders.

"As previously announced, the proposed dividend distribution of Nenaco was conditional on MPC and Nenaco obtaining requisite approvals from creditors and regulatory agencies. These approvals have not been obtained, hence the MPC board’s decision," Pangilinan explained.

In line with its strategic focus on property development, MPC has opted to divest from its remaining non-property ventures Nenaco and 1st e-Bank as their operations, particularly that of Nenaco, continue to weigh down on MPC’s bottomline.

In a span of more than three years, the once diversified Philippine flagship of the Hong Kong-based First Pacific group has sold off its interests in several businesses: Holland Pacific Paper Inc., Metro Bottled Water Corp., Metrolab Industries Inc., Metrovet Inc., Steniel Manufacturing Corp. and PLDT.

Despite the snag in Nenaco’s disposal, Pangilinan said the board’s decision was not entirely regrettable since over the past months, Nenaco’s financial performance "has been trending towards positive territory."

In the nine-month period ending September this year, Nenaco’s revenues improved by 10 percent to P1.8 billion, as against P1.63 billion in the same period last year, as increased passenger and freight rates offset the decline in passenger and cargo volumes dragged by the market’s slowdown.

As a result, Nenaco contributed a net operating income of P17 million before financing charges, a turnaround from the net operating loss of P59 million a year ago.

Last year, Nenaco remained in the red as it incurred a P603 million net loss from operations, although this was lower than the P778 million loss in 1999.

Among the factors that contributed to the continued losses were the heightened competition brought about by the entry of the giant WG&A shipping line in its Bacolod home port; the contraction in the passenger and freight volume; as well as the doubling of fuel prices.

Meanwhile, Pangilinan said MPC has been receiving several offers for its 32-percent stake in 1st e-Bank, although its financial advisor ABN-Amro is still evaluating these proposals.

Among those which reportedly expressed interest in the bank are Asia United Bank, Bank of Commerce and Banco de Oro.