Tanduay eyes stake in Victorias

Tanduay Holdings Inc. plans to acquire shares in sugar miller Victorias Milling Co. Inc., the liquor firm told the Philippine Stock Exchange.

Tanduay said it has authorized its chief finance officer Nestor Mendones to bid and negotiate for the acquisition of shares held by MJ Osorio in Victorias.

Victorias is now majority-owned by the Lucio Tan Group of Companies following a capital infusion of P300 million last year.

Deutsche Bank AG London earlier acquired 36.89 million shares of the country’s largest sugar firm.

Deutsche Bank AG is a member of the Deutsche Bank Group, a leading global investment bank with a strong and profitable private clients franchise.

Weighed down by its huge debt, Victorias filed for suspension of payment of its loan obligations and for corporate rehabilitation in 1996.

Victorias is under a 15-year alternative rehabilitation plan developed by creditor-banks. The plan requires the sale of non-strategic assets and subsidiaries including Victorias Food Corp., restructuring loans from banks and debt-to-equity conversions.

Victorias Foods produces the popular Victorias brand Hot Sardines in Oil Spanish Style and Hot Bangus in Oil Spanish Style under its fish lines and luncheon meat under its meat lines as well as American cooked ham, smoked bacon and Chinese ham.

The sugar firm’s present cash flow of P900 million to P1 billion would be used to settle debts until next year. Interest payments this year amount to P360 million, while principal debt plus interest due in 2007 ranges from P700 million to P800 million.

Victorias is in talks with prospective local investors and hopes to reach an agreement within the year.

The sugar miller continues to implement cost-cutting measures to stay afloat. It implemented a mass-retrenchment program, which reduced the number of its mill employees to 1,300.

Victorias had a capital deficiency of P1.6 billion as of end-November 2005.