Ismael Cabonse, WG&A’s acting corporate information officer, said the company’s board approved the direct purchase of the vessels from Japan’s Meimon Taiyo Ferry Co. Ltd., an affiliate of the global shipping giant Mitsui O.S.K. Lines Ltd.
WG&A presently operates 23 vessels nationwide and is the largest provider of domestic ferry transportation on both the passenger and cargo business. Formed in 1996 through the merger of three family-controlled shipping companies — the Chiongbians’ William Lines, Carlos Gothong Lines Inc. and Aboitiz Shipping Corp. — WG&A became the largest and most profitable shipping company in the Philippines. In the first half of this year, its operating profit reached P649 million, up 11 percent from last year’s level while net income stood at P571 million on revenues of P6.7 billion.
Last July, the Cebu-based Aboitiz group — through its listed holding firm Aboitiz Equity Ventures Inc. — bought out the Chiongbians’ and Gothong’ stakes for P3.65 billion, raising its controlling interest from 31 percent to a dominant 92 percent in WG&A.
Early this month, the board and stockholders of WG&A voted to change the company’s name to Aboitiz Transport Group Inc. to reflect the change in ownership control.
Based on the agreement, AEV will pay half of the purchase amount in cash on closing date with the remaining balance payable over five years with interest fixed at 12 percent and a one-year grace period on the principal amount.
AEV has filed a mandatory tender offer to the remaining minority stockholders of WG&A to buy out their shareholders of WG&A to buy out their shareholdings.
In the meantime, WG&A has declared a stock dividend in the form of redeemable preferred shares (RPS) as approved by the Securities and Exchange Commission in March.
Set on Jan.7, 2003 as payment date, the RPS will be taken out of the company’s existing additional paid-in surplus at the ratio of one RPS for every four common shares held by stockholders of record as of Dec. 6, 2002.
Worth approximately P2.5 billion, WG&A said it plans to redeem the RPS as quickly as possible, depending on the company’s cash flow and financial condition. Based on the terms of the RPS issue, the company may redeem the RPS at a minimum redemption price of P6 per share over a maximum period of 10 years and at a minimum aggregate amount of redemption for any calendar year of P250 million.