Roxas Holdings Inc., the country’s largest integrated sugar producer, is selling its mill and ethanol plant in Negros Occidental province to Universal Robina Corp. for an undisclosed amount.
Roxas Holdings said in a disclosure to the stock exchange Friday the company and wholly-owned subsidiaries Central Azucarera De La Carlota Inc. and Roxol Bioenergy Corp. reached an agreement with URC on the sale of the sugar mill, ethanol plant and other investment properties in La Carlota City.
The consummation of the sale transaction is subject to the approval of the Philippine Competition Commission and creditor banks, in addition to the satisfactory completion of other closing conditions.
“We are hopeful that we can get the necessary approvals before the start of the next crop year,” Roxas Holdings chairman Pedro Roxas said.
“We believe that this sale transaction should raise significant competition concerns as there are many players in Negros, considering that the province is the country’s sugar capital,” he added.
This is the second time that Roxas Holdings signed an agreement with URC on the sale of its sugar milling assets.
The first was in 2018 when Roxas Holdings agreed to sell its sugar milling facility in Nasugbu, Batangas. The deal, however, did not proceed as the transaction was blocked by the PCC, the government’s anti-trust body.
Roxas Holdings president Hubert Tubio said the sale of La Carlota assets would enable the company to refocus resources on rebuilding its Nasugbu sugar milling and refining facilities.
“Over the years, demand for quality Central Azucarera Don Pedro (CADP) refined sugar has not wanted even with the influx of imports. Industrial customers still prefer sourcing their requirements from CADP considering its proximity to the National Capital Region,” he said.
Roxas Holdings, without disclosing the acquisition price, said the amount represented a fair market value of the plant and equipment, as well as the building and land, and investment shares.
Roxas Holdings executive vice president and chief finance officer Celso Dimaruct said the sale transaction was considered following the aggressive stance of the company to reduce the levels of debt to lesses business risk.
“(We plan) to prepay all long term debts and reduce short term dents to levels sufficient for our working capital needs,” he said. “Earlier the fiscal year, certain assets were likewise disposed that enabled the group to prepay its maturing obligations within the year.”