PSE extends suspension of trading on Chempil, LMG shares

MANILA, Philippines - The Philippine Stock Exchange has extended the voluntary share trade suspension of Chemical Industries of the Philippines (Chempil) and unit LMG Chemicals for another 10 days pending talks with prospective investors.

Chempil and LMG requested an extension of the trading halt from Feb. 20 to March 2 to allow an orderly negotiation process.

Chempil chairman Antonio Garcia said the company has received offers from a consumer-related group and an oil and gas firm to take over LMG via a backdoor listing route. He said he expects discussions to be completed by March.

Chempil has long put LMG on the auction block but couldn’t get a deal done due to a garnishment case pending at the Supreme Court. The company owns 73.9 percent of LMG.

Garcia said the deal would still push through despite the unresolved case, pointing out that proceeds would be put in escrow until the court issues a resolution regarding the matter.

But his brother, Ramon, has expressed reservations over the sale of LMG on concerns it would not create shareholder value.

Prior to the suspension, LMG and Chempil shares were last traded on Feb. 6 at P6.05 and P137 each.

LMG, in particular, has seen a sharp increase in its share price since the start of the year. From only P1.84 on Jan. 6, the stock has peaked to as much as P8.40 on speculations of a looming management control.

Incorporated in April 1970, LMG is primarily engaged in the manufacture and distribution of sulfuric acid and detergent sulfur. Sulfuric acid is used in car batteries, fertilizers, detergents, water treatment and wastewater treat.

On Oct. 23, 2007, LMG transferred its acid plant and tank farm properties to wholly-owned subsidiaries, Chemphil Manufacturing Corp. (CMC) and LMG Land Development Corp. (LMGLDC), respectively, to consolidate the acid plant and tank farm operations into individual holding companies for better management and monitoring.

In August 2008, LMG sold its entire shareholdings in LMGLDC to Chemoil Energy Philippines Inc. and Chemoil Fuel Philippines Inc. LMG owns 100 percent of CMC and 60 percent of Kemwater Phil. Corp. (KPC).