Conglomerate Phinma Corp. is investing $50 million via preferred shares in a cement company in Vietnam.
Phinma said in a disclosure to the stock exchange it signed a term sheet agreement involving the investment of $50 million in Song Lam Cement Joint Stock Company, which owns the largest cement plant in Vietnam.
Song Lam is a subsidiary of Vissai, the largest privately-owned cement manufacturer in Vietnam that exports to 37 countries including the Philippines. It has a total production capacity of 13.6 million tons a year.
Phinma said Song Lam would also be a major supplier of its cement subsidiary Philcement Corp.
The investment via preferred shares will entitle Phinma to receive annual fixed cumulative dividends of 7.5 percent. The preferred shares are convertible into common shares.
“Phinma will also be entitled to nominate one member of the board of directors as well as the chief financial officer of the company,” the company said.
Following the disclosure, the Philippine Stock Exchange immediately implemented a trading suspension on Phinma shares, pending the submission of additional disclosure requirements regarding the transaction.
Share price of Phinma closed at P9.18 Wednesday.
Philcement, which is 60-percent owned by Phinma, is currently constructing a cement terminal in Mariveles, Bataan. The facility is scheduled to be completed and operational before the end of the year.
Phinma re-entered the cement industry last year. In its first year of operation, the group’s cement business made strong inroads in re-introducing Union Cement brand into the market, achieving P1.5 billion in revenues over the year.
Union Cement is available in selected markets of North and Central Luzon, parts of the Visayas, and Northern and Southern Mindanao.
The Phinma group exited the cement business in 2004 when it sold its majority interest in Union Cement Holdings Corp. which became a part of Holcim Philippines Inc.
Phinma is a holding company with investments in the education, steel products, housing, business process outsourcing and energy sectors.
