LT Group Inc., the listed holding company of tycoon Lucio Tan, said Friday it agreed to sell liquor firm Asian Alcohol Corp. to Victorias Milling Co. Inc. for P2.21 billion.
LT Group said in a disclosure to the stock exchange unit Tanduary Distillers Inc. and two other minority shareholders signed a share sale agreement with VMC involving entire stake in AAC.
VMC said in a separate disclosure the acquisition would provide cost synergy in terms of shared manpower, information technology, and supply chain. It will also allow VMV to have access to expertise that can streamline the processes to optimize production, increase recovery and efficiency of the plants.
“The company being under corporate rehabilitation is mandated to continuously create measures to attain sustainable financial stability. The horizontal integration will not only improve the profitability and cash flows of the group, it will also increase the group’s market share in the ethanol industry, and in extension its contribution to the energy security of the country with the least negative impact to the environment,” VMC said.
LT Group is primarily engaged in banking and financial services, real estate, liquor and beverage businesses. It also holds a 30-percent interest in VMC.
ACC is the second largest distillery in the Philippines operating in Negros Occidental. It has distillation process that uses molasses, yeast, water and other ingredients. It has a 10-hectare plant in Negros Occidental, which is the center of the country’s sugar industry.
It has a modern wastewater treatment plant which converts distillery waste into biogas energy for power requirements. It has a daily rated capacity of 210, 000 liters of quality ethyl alcohol.
VMC said it would pay the purchase price in tranches, subject to closing conditions. The company said it was expecting to complete the acquisition before the end of the year.
AAC reported a net loss of P32.88 million in 2021, a reversal of the P181.8-million net income recorded in 2020 as sales fell 7.6 percent to P2.07 billion from P2.24 billion.