AS PART of the company’s debt-restructuring program, Victorias Milling Co. Inc. (VMC) is converting its credit bonds into equities.
The country’s biggest sugar miller disclosed on Monday that its board of directors approved the conversion of P272,857,968 worth of convertible notes into 272,857,968 shares, equivalent to P1 apiece.
Initially, VMC will distribute 195,511,324 shares out of the unissued capital stock in October 2014.
The remaining 77,346,644 shares will then be issued from and in support of its capital stock hike from 2,563,035,708 to 2,640,382,352.
After this, the company will file a listing application of the same number of 272,857,968 as new shares with the Philippine Stock Exchange.
Established in May 7, 1919, VMC is involved in integrated raw and refined sugar manufacturing, with plant facilities in Victorias City, Negros Occidental.
Through its operating subsidiaries Victorias Foods Corp., Canetown Development Corp., Victorias Quality Packaging Corp., Victorias Golf & Country Club Inc., and Victorias Agricultural Land Corp., it is engaged in various trades such as fish canning, real estate, sugar-sack manufacturing and packaging, and golf-course and restaurant operations.
The firm encountered financial difficulties in the mid-1990s due to its failure to address rising overhead costs despite the falling domestic prices of sugar, and competition from both new and expanded sugar mills and refineries. In 1997 it came up with an alternative rehabilitation plan, with the distribution of P2.4 convertible notes that bondholders could opt to convert into XXX common shares until 2018. It was approved by the Securities and Exchange Commission in 2000.
The company has made a significant reduction of its deficit by a total of P3.5 billion from P3.8 billion in August 31, 2005, to P300 million in May 31, 2013.
Pursuant to the Debt Restructuring Agreement, VMC also issued shares of stock for the conversion of certain convertible notes to equity of P310 million in December 2010, P119 million in December 211, and P273 million in December 2012.
As of May 31, 2014, VMC’s year-to-date consolidated net income grew by 53 percent to P947.7 million from P617 million last year.
Net-income margin (net income as a percentage of revenue) rose from 21 percent to 22 percent in the third quarter of this year due to the lower cost of goods sold as a percent of revenues.
Also, revenues expanded from P2.894 billion to P4.259 billion, up 47 percent year-on-year.