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Wednesday, April 9, 2014

Lucio Tan Group doubles stake in Victorias Milling

MANILA – Liquor and tobacco tycoon Lucio Tan bought more shares in Victorias Milling Company (VMC) amid speculation of First Pacific Co Ltd’s entry in the country's largest sugar firm.

In a disclosure to the Philippine Stock Exchange, LT Group Inc said it increased its direct stake in the sugar company to 14.8 percent from 7.40 percent.

One of the significant shareholders of VMC, Tan has been snapping up its shares with the possible entry of the group of First Pacific managing director Manuel V. Pangilinan through the latter's acquisition of the Metrobank Group's seven percent stake, according to previous reports.

A week ago, Pangilinan said the Hong Kong-based conglomerate was looking at several opportunities in the Philippine sugar industry. His group earlier bought into Roxas Holdings Inc, another sugar miller.

Tan has business interests in tobacco, alcoholic and non-alcoholic beverage, banking and property development.

VMC is under a 15-year rehabilitation program that started in September 2003, coinciding with the payment period for its outstanding loan obligation amounting to P4.417 billion.

In the mid 1990s, VMC encountered financial difficulties due to its failure to effectively contain rising overhead costs against a backdrop of falling domestic sugar prices, and increasing competition from both new and expanded sugar mills and refineries.

Competition in the sugar industry is seen to heat up with the start of the Asean Economic Community next year when tariffs across the region would drop to zero.

Source: Interaksyon

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