Roxas Holdings Inc. (RHI, PSE: ROX), the largest integrated sugar producer in the country, together with its wholly-owned subsidiary, Central Azucarera Don Pedro Inc. (CADPI) has reached an agreement with Universal Robina Corp. (PSE: URC) for the sale of its sugar milling and refining operations in Brgy. Lumbangan, Nasugbu, Batangas.
The consummation of the sale transaction is subject to satisfactory completion of certain conditions, including the approvals of the Philippine Competition Commission (PCC) and creditor banks. The sale transaction is currently undergoing review with the PCC.
“We are hopeful that we can get the necessary approvals before the start of the next Crop Year,” Chairman Pedro Roxas said. “We believe that the Sale Transaction will bring about significant improvements in the sugar industry in Batangas for the benefit of all stakeholders – farmers,
community, employees and mill alike.”
Total raw sugar production in Batangas is around 3 million 50-kg bags, or roughly 6% of total annual national sugar production.
President and CEO Hubert D. Tubio said that the sale of our Nasugbu sugar milling and refining facilities will allow us to focus on RHI’s operations in Negros. “We have significantly improved and grown the operations of our sugar milling plant and two ethanol production plants in Negros over the last two Crop Years and we hope to further enhance our operations after the Sale Transaction,” said Tubio.
Executive Vice President & CFO Celso T. Dimarucut said that the Sale Transaction will significantly reduce the Group’s leverage as proceeds will be used to pare down debt. “We will prepay all long-term debt and reduce short-term debt to levels sufficient for our working capital needs. Our strengthened balance sheet will enable us to be more agile in responding to changing market conditions and will give us the flexibility to pursue opportunities to grow at a much faster pace,” he said.