PRCI sees P11-million gain from sale of JTH Davies

MANILA, Philippines - Race track operator Philippine Racing Club Inc. (PRCI) expects to book a profit of at least P11 million from the sale of its controlling stake in JTH Davies Holdings Inc.

In a disclosure to the Philippine Stock Exchange, PRCI said it would raise a minimum P153.76 million from the sale of 210.636 million shares or 68.57 percent of JTH Davies, an agri-chemical and constructing holding company. The recorded cost of PRCI’s investment in JTH is P142.81 million or P0.68 per share as of Sept. 30 this year.

PRCI is selling the shares to an undisclosed buyer at not less than P0.73 each share, resulting in a profit of about P11 million. “The prospective buyer has requested to remain anonymous in the meantime until there is an agreement in principle of the terms and conditions of the transaction,” PRCI said.

According to PRCI, proceeds from the sale will be used to pay off a significant portion of the company’s outstanding loans. “As soon as portion of the loans is paid, PRCI can immediately save on interest charges, “ the company said.

The planned divestment is pursuant to PRCI’s decision not to enforce the property-for-share swap agreement it entered into with JTH Davies Holdings Inc. after the Bureau of Internal Revenue ruled that the exchange is subject to value-added tax.

The proposed deal would have involved the issuance by JTH Davies of 795.818 million shares to PRCI in exchange for the latter’s 21-hectare horse race track in Sta. Ana, Makati.

The share swap had also met stiff opposition from PRCI minority shareholders on the ground that it is disadvantageous to the company.

In spite of the termination of the share-swap agreement, PRCI is pushing through with the relocation of the race track to a new site within the sprawling 70-hectare Saddle & Clubs Leisure Park in Trece Martires, Cavite.

The new racetrack in Cavite – which is more than three times the size of the Sta. Ana site – will include two race tracks, a stable facility with an initial 78 building cluster that can house over 1,000 horses and a four-storey grandstand