Roxas Holdings Inc. agreed to accept the improved offer of Tanduay Distillers Inc. to purchase the former’s sugar mill and refining facilities in Nasugbu, Batangas.
RHI vice chairman Manuel Pangilinan said in an interview he had given the go-signal to accept the offer from Tanduay, a company led by billionaire Lucio Tan, subject to due diligence.
“Basically, we have given the go signal to go ahead. There is no assurance of closing because it will still be subject to due diligence,” Pangilinan said.
Pangilinan said while Tanduay submitted an improved offer, the amount was still less than what the company wanted.
“It is not quite what we want but it is an improvement,” Pangilinan said.
RHI received an indicative non-binding proposal from Absolut Distillers Inc., a unit of Tanduay, to purchase the company’s assets in Nasugbu, Batangas including the land, sugar mill and refinery plants of Central Azucarera Don Pedro Inc.
RHI, however, turned down ADI’s proposal, saying the Nasugbu assets’ fair value was worth substantially more than the ADI offer.
Tanduay then said it would re-submit a bid proposal with a higher price. Tanduay’s first offer was a little higher than P4 billion. The Batangas assets have a total book value of P6.5 billion.
The acquisition of CADPI would provide Tanduay another source of molasses which are the necessary raw materials in manufacturing alcohol.
RHI was earlier in talks with Universal Robina Corp. of the Gokongwei group for the sale of the Nasugbu assets.
The deal was blocked by Philippine Competition Commission which said the deal would lead to a monopoly in sugarcane milling services in Southern Luzon.
RHI is selling CADPI to pare down its P11 billion debt.
RHI is the largest integrated sugar business in the Philippines. It manages CADPI and Central Azucarera de la Carlota Inc. in Negros Occidental.
It also produces ethanol through Roxol Bioenergy Corp. and San Carlos Bioenergy Inc. in Negros Occidental.
RHI is expected to register a net loss this year amid lower sugar production.