The Yuchengco Group of Companies (YGC) is consolidating its privately-held insurance and property businesses worth P15.74 billion under the publicly-listed House of Investments, Inc. (HI).
In a disclosure to the Philippine Stock Exchange, the group said this reorganization of its businesses also includes the reduction of its stake in EEI Corporation through a sale of P1.25 billion worth of stock.
The sale of a 20 percent stake in EEI to RYM Business Management Corporation of House Speaker Martin Romualdez raised funds for the reduction its debt, strengthen its balance sheet, and make it a stronger player.
“Overall, the restructuring will make HI a more diversified conglomerate with the resources to take advantage of opportunities moving forward,” the firm said.
To effect the restructuring, House of Investments will issue new shares in exchange for 77.32 percent of MICO Equities, Inc., 51 percent of Sun Life Grepa Financial, Inc. (SLGFI), and 49 percent of Grepa Realty Holdings, Inc. (GRHI) for a total consideration of P15.74 billion.
MICO Equities, Inc. is the holding company of YGC that holds the investments in non-life insurance through Malayan Insurance Co., Inc. (MICO).
MICO is one of the leading non-life insurance companies in the Philippines that is authorized by the Insurance Commission to underwrite the following: Aviation, Engineering, Fire/Property, Marine, Miscellaneous Casualty, Motorcar, Personal Accident, Residential Fire and Travel Insurance, and Surety/Bonds.
It has an extensive network of 35 branches and service offices nationwide.
SLGFI is a joint venture between YGC and Sun Life Financial (Philippines), a top player in the Philippine Insurance Market for over 120 years.
SLGFI provides financial planning and guidance; life and health products for every stage of life; investment, wealth accumulation, and savings products for individuals, families, and corporations; and insurance benefit offerings for companies and their employees.
HI will acquire 49 percent of GRHI to expand its property portfolio. The main asset of GRHI is the Grepalife Building which stands on a 5,000 sq.m. lot along Sen. Gil J. Puyat Avenue in Makati.
This will add to the property portfolio of HI which includes A.T. Yuchengco Centre, RCBC Plaza, and the upcoming The Yuchengco Centre. GRHI also owns properties in Cebu, Antipolo, Tacloban, Manila and a lot in Carmelray in Calamba which is an industrial park classified as Special Economic Zone by PEZA.
Under its Share Swap Agreement with Pan Malayan Management & Investment Corporation (PMMIC), HI will issue 397.7 million of its common shares to PMMIC in exchange for the acquisition of 100 percent of PMMIC’s outstanding shareholdings in MICO Equities, Inc.
The subscription price for the shares to be issued to PMMIC is P22.71 per share or a total subscription price of P9.03 billion.
HI also entered into a Share Swap Agreement with GPL Holdings, Inc. (GPLH) whereby HI will issue 295.13 million common shares to GPLH in exchange for the acquisition of 100 percent SLGFI and GRHI.
The subscription price for the shares to be issued to GPLH is P22.71111 per share or P5.04 billion for SLGFI and P1.67 billion GRHI, or a total subscription price of P6.7 billion.
For these stock issuances, HI is raising its authorized capital stock (ACS), from P2.88 billion to P3.21 billion. The increase in ACS will be presented for the approval of the Company’s stockholders during its Annual Stockholders’ Meeting in July and shall be subject to the approval of the SEC.