By James A. Loyola
PHINMA Corporation is investing $50 million in Song Lam Cement Joint Stock Company of Vietnam through a subscription of preferred shares that are convertible into common shares.
In a disclosure to the Philippine Stock Exchange, PHINMA said its Executive Committee, with delegated authority from the Board of Directors, has authorized the execution of a binding Term Sheet.
The agreement was signed with Song Lam, Vissai Ninh Binh Joint Stock Company, and Hoang Minh Truong for the proposed investment in Song Lam, a subsidiary of Vissai.
Vissai is the largest, privately owned cement manufacturer in Vietnam and exports to 37 countries including the Philippines.
Song Lam owns the largest cement plant in Vietnam and will be a major supplier of Philcement Corporation, a 60 percent owned subsidiary of PHINMA.
The Preferred Shares will be entitled to receive annual, fixed cumulative dividends of 7.5 percent. The preferred shares shall be convertible to 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.
Philcement is building a cement terminal with a storage capacity of two million tons for its cement importation business in Mariveles, Bataan at a cost of about P700 million.
Mariveles is a deep-sea port and can thus accommodate very large Panamax vessels from Vietnam which improves the efficiency and the cost per bag of cement.