Yuchengcos further reduce EEI stake to just 20%

The Yuchengco family is further paring down its stake in EEI Corporation with the sale of a 14.35 percent stake in the construction firm to Industry Holdings and Development Corporation (IHDC) for P1.08 billion. In a disclosure to the Philippine Stock Exchange, Yuchengco holding company House of Investments (HI) said its Board of Directors has approved a plan to sell 148.66 million common EEI shares to IHDC at the book value of P7.2348 per share. No agreement has been signed yet. EEI had earlier singed a Memorandum of Understanding (MOU) with IHDC for the joint exploration and co-development of three potential solar farms. IHDC is owned by the Chua Group, headed by Francis Chua, a successful construction engineer with established business interests in construction supply including pre-cast concrete structures, cement and aggregates, as well as investments in the logistics and real estate sectors. “IHDC’s entry as a strategic partner is deemed beneficial to EEI’s growth plans and restructuring efforts,” said HI noting that it will have a partner that will improve the performance of EEI. Proceeds from the share sale will be used by HI to increase the capitalization of wholly-owned subsidiary ATYC, Inc. by subscribing to P1 billion worth of preferred shares consisting of 10 million shares at P100 each. The additional investment will be used to reduce the loans in ATYC—resulting in lower interest payments and reducing exposure to market risk. ATYC was incorporated in 2022 and owns the A.T. Yuchengco Centre in Bonifacio Global City. Once the sale is completed, HI’s stake in EEI will be reduced to 31 percent. Last April, HI reduced its interest in EEI to 35.35 percent with the sale of 20 percent of EEI to RYM Business Management Corporation of House Speaker Martin Romualdez also as a strategic partner. RYM acquired the 20 percent stake in EEI from HI for P1.25 billion consisting of 207.26 million EEI shares at P6.0312 per share. HI said it decided to allow the entry of RYM into EEI because “The opportunities in the construction sector can be best explored with a strategic partner” and the cash raised will allow it to “reduce exposure to increasing interest rates by using the proceeds to reduce the loans.” The RYM acquisition was paid in cash and the purchase price represented a 15 percent discount to the book value of EEI.