Tanduay sells franchise for P75 million

After two weeks of negotiations, Basic Holdings Inc. and Air Freight 2100 - sole distributor of Federal Express in the country - reached an agreement for a PBA franchise sale worth P75 million yesterday.

PBA commissioner Jun Bernardino said they had received a term sheet by the two parties and they will include the proposed sale in the agenda for Tuesday’s meeting of the PBA board of governors.

The proposed sale needs board approval to become a done deal.

The term sheet, which gave the details of the deal, was signed by Tanduay CEO Wilson Young and Air Freight top official Lito Alvarez. It was forwarded yesterday to the PBA Commissioner’s Office, with copies furnished members of the PBA board, according to Bernardino.

He said the board will observe "due diligence" before coming up with a decision on the proposed sale.

"Our office will look at the company profile (of Air Freight 2100), check its financial viability and find out who are the officers – which is the normal practice before a new member is admitted," said Bernardino.

Under the agreement, Air Freight is to buy Tanduay for P75 million, giving a down payment of P25 million and paying the balance on installment basis over the next four years.

A provision in the contract stipulated that "pending full payment, Air Freight will not assign its right, title and interest in this transaction in the PBA or as a member of the PBA board withour prior written consent of Basic Holdings Inc. and the PBA board of governors."

The contract also gives Basic Holdings Inc. the option to "assign its right in the transaction."

If the deal is approved, Bernardino said the league is to get a 10-percent share of the purchase. — Nelson Beltran