THE public holding and management firm of the Aboitiz Group of Companies executed a facility agreement with a Japanese bank to gain a bridge loan of up to $400 million.
Aboitiz Equity Ventures Inc. (AEV) disclosed on Monday its signing of a credit pact with the Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU) for such amount to bankroll its purchase of an established cement maker to complement its foray into the infrastructure business.
Loan proceeds, according to AEV, will be used to partly fund its investment in holding companies for the acquisition of the various Philippine assets and businesses of Lafarge SA.
These include the cement production facilities in Bulacan, Norzagaray, Teresa (Rizal province), Batangas and Danao City (Cebu); as well as other related businesses and services of the global firm, like limestone quarries.
AEV finally inked the exclusive agreement for its P24- billion investment deal with Irish firm Cement Roadstone Holdings Inc. (CRH Plc.) to buy the cement operations of Lafarge Holdings (Philippines) Inc. Apart from gaining the majority stake in Lafarge Republic Inc., the transaction also involves the acquisition of shares in Luzon Continental Land Corp. and Lafarge Cement Services Philippines Inc.—both comprising the majority of Lafarge’s Philippine cement operations.
Full implementation and completion of the deal is expected to be completed within the second half of 2015, subject to the conditions under the merger of Holcim and Lafarge and the approval of the global sale of Lafarge assets.
Erramon I. Aboitiz, president and CEO of AEV, previously said that they are bullish on the prospect of entering this new business in support of their thrust to develop infrastructure as one of their core businesses and build a more diversified income source for the company.
With their partnership, AEV aims to take an already established domestic cement operations and management team to greater heights, as the nation’s strong demand for quality cement is seen to continue given its flourishing economy and booming infrastructure sector.
AEV has major investment holdings in Aboitiz Power Corp., Union Bank of the Philippines, Pilmico Foods Corp., and Aboitiz Land Inc.
Infrastructure is the fifth main businesses of the Aboitizes after power, banking, food and land.
From January to June 2015, the company reported a consolidated net income of P7.82 billion, or 18 percent lower than combined profits during the same period last year. Core income of AEV0, likewise, decreased by 9 percent to P7.93 billion.
Its power strategic-business unit accounted for 76 percent of the company’s total earnings, while food, banking and property groups contributed 11 percent, 11 percent and 3 percent, respectively.
Established in 2006, BTMU serves as the core retails, corporate and investment banking arm of the Mitsubishi UFJ Financial Group.
It is Japan’s largest bank and one of the world’s largest, with offices throughout Japan and in 40 other countries.