Metro Pacific currently has only one operating business left in Negros Navigation Co. (Nenaco) after it transferred its entire shareholding in Landco Pacific Corp. to the recently-incorporated debt-free investment holding company Metro Pacific Investments Corp. (MPIC).
Nenaco’s consolidated revenues fell 22 percent in the period January to September this year to P1.99 billion from the previous level’s P2.5 billion, mainly due to lower volumes of passengers and cargo. During the period under review, the company’s fleet was reduced to just six from nine last year owing to decreasing margins and widespread overcapacity.
Consolidated cost of sales, which include vessel operating costs, reached P1.79 billion, 19 percent lower than the year ago’s P2.2 billion, due to Nenaco’s reduced operations and enhanced cost controls. Financing charges, meanwhile, amounted to P162.3 million compared with P136.9 million the same period a year earlier, due to increased interest charges.
"We are in discussions with a number of parties in order to find ways to address effectively Nenaco’s losses, and to enable that business to determine its own growth trajectory and its future," Metro Pacific president Jose Ma. K. Lim said in a statement.
MPIC, meanwhile, reported pro forma consolidated revenues of P2.51 billion, reflecting increased revenues by Landco. Cost of sales amounted to P1.984 billion in 2006 versus P2.183 billion in 2005, reflecting reduced operations wiithout Nenaco.
Landco, on the other hand, registered a net income of P43.8 million for the first nine months of 2006, due to healthy take-up of new and expansion projects. The initial core business of MPIC, Landco, is presently engaged in an aggressive effort to expand its product portfolio and its business.
MPIC launched last Oct. 27 a tender offer for the common shares held by the minority shareholders of Metro Pacific. The tender is being made to allow minority shareholders to migrate to the new and debt-free MPIC.
MPIC is offering one new MPIC share plus three attached warrants in exchange for every four Metro Pacific shares outstanding. Each warrant will entitle a shareholder to subscribe for its equivalent of one common share of MPIC at a par value of P1 per share. The tender offer will close on Nov. 28, after which it is anticipated that MPIC will soon list on the Philippine Stock Exchange while Metro Pacific will withdraw its PSE listing.
"Moving forward, we are focused on the ongoing MPIC tender offer and in completing the reorganization and recapitalization plan. The result will be a well-capitalized and listed MPIC with considerable growth opportunities for the future," Lim said.