JG Summit unloads P12-B URC shares

MANILA, Philippines - JG Summit Holdings Inc., the investment  holding firm of tycoon John Gokongwei, has unloaded a portion of its stake in snacks leader Universal Robina Corp. (URC).

In a regulatory filing, JG Summit said it sold 105 million common shares of subsidiary URC through an accelerated overnight equity placement at P115 per share.

The sale price represents a 6.95-percent discount to the previous closing price of P123 per share.

“The sale raises approximately P12 billion for the company and the proceeds will be used for general corporate purposes,” JG Summit said.

Early this week, the Gokongwei family’s listed holding firm struck a deal to buy San Miguel Corp.’s 27-percent stake in power distribution giant Manila Electric Co. (Meralco) for roughly P72 billion.

“JG Summit intends to finance the acquisition with a combination of debt and equity capital,” the company earlier said.

SMC sold its Meralco shares to bankroll the conglomerate’s various  investment opportunities like infrastructure projects and oil and gas acquisitions.

For its part, JG Summit will again be partnering with the group of businessman Manuel V. Pangilinan.

In 2011, telecommunications behemoth Philippine Long Distance Telephone Co. acquired Sun Cellular operator Digital Telecommunications Philippines Inc. of the Gokongwei family through a P69.2-billion share swap deal.

JG Summit is also venturing into infrastructure projects as it formed a joint venture firm with Pangilinan-led Metro Pacific Investments Corp. to bid for the expansion and operation of the P17.5-billion Mactan Cebu International Airport project.

“After the sale, the company will continue to hold 55.7 percent in URC,” JG Summit said. Prior to the transaction, the conglomerate controlled roughly 61 percent of the snacks and beverage firm.

Food and beverage giant URC is jacking up its capital spending for fiscal year 2014 to a record $150 million from last year’s $120 million to support its local and regional expansion.

The firm wants to become a major player with strong brands in Southeast Asia, with Myanmar being its newest market.

URC’s, whose fiscal year starts in October and end in September the following year, is investing heavily to retain its market leadership in the Philippines and strengthen its foothold in Southeast Asian countries Vietnam, Thailand and Indonesia.

The company’s expansion is hinged on Jack n’ Jill for the chips, biscuits, packaged cakes, confectioneries, candies and chocolates; C2 for ready-to-drink tea and Great Taste coffee.

So far, the Philippines accounts for two-thirds of the revenues of URC, which started as a cornstarch maker in 1954 and it now one of the fastest-growing Southeast Asian food companies.