The Philippine Competition Commission (PCC) has approved the acquisition by Universal Robina Corporation of Roxas Holdings’ sugar mill and ethanol plant in La Carlota City, Negros Occidental and investment properties consisting of shares in Najalin Agri-Ventures, Inc.
The Proposed Sale Transaction between the RHI Group (RHI and its wholly-owned subsidiaries, Central Azucarera de La Carlota, Inc. and Roxol Bioenergy Corporation) and URC were dislosed last June.
The PCC said "the Commission finds that the proposed acquisition by URC of assets in La Carlota and Roxol, and shares in Najalin will not likely result in substantial lessening of competition in the markets for the provision of sugar cane milling services and tolling services in Negros Island, as well as the national markets for bioethanol, the sale of raw sugar sold in wholesale, and the sale of molasses to traders.”
“Following the favorable PCC decision, the parties to the transaction shall aim to secure the other closing conditions, as may be applicable, and shall work towards closing the asset sale transaction at the soonest possible time,” said RHI.
The RHI Group will use the proceeds of the Proposed Sale Transaction to prepay all long-term debt and reduce short-term debt to levels sufficient for its working capital needs.
The sale of the La Carlota assets will allow RHI to refocus its resources on rebuilding its Nasugbu sugar milling and refining facilities, among others.
Under the terms of the Proposed Sale Transaction, URC will acquire all buildings, improvements, machineries and equipment, laboratory equipment, as well as the land on which these plant and buildings are located and investment properties that are necessary for the continuing operations of the mill and ethanol plants located at La Carlota City, Negros Occidental.
URC said the acquisition will create synergies in the sugar industry in Negros Occidental. This transaction is expected to enhance capability of URC to provide good milling services to the sugarcane planters.
Aside from the operational synergies that will be achieved between La Carlota and existing URC operations in sugar, the acquisition is also intended to help sugarcane planters increase their productivity, as well as help local communities in Negros Occidental by providing more opportunities.
In addition, the acquisition will allow URC to continue in its efforts to support the development of the sugar industry in the Philippines.