Cement firm Royal Round Inc. (RRI) bought yesterday through a block sale, 13.15 percent of Republic Cement Inc. (Republic Cement) through Calumboyan Properties Inc., (CPI), an existing stockholder of Republic Cement, at P4.30 per share or a total of P943 million.
With the sale, RRI which previously acquired a 4.5-percent stake in RCI, now has a total of 17.6-percent stake, making it the third largest shareholder of the cement company, next to Blue Circle Philippines Inc. which has an existing stake of 28.20 percent and South Western Cement Ventures Inc. (SWCV) which owns 20.98 percent.
The sale involved 219,279,664 common shares, representing 13.15 percent of the total outstanding shares of Republic Cement.
Gilbert Garcia, an official of RRI, said the selling price was negotiated, determined to approximate the price of the last similar strategic block of Republic Cement transacted through the Philippine Stock Exchange.
Republic Cement is part of the five-way consolidation of cement companies which was sealed last December. The other cement companies are fortune Cement, Zeus Holdings, Iligan Cement and Mindanao Portland Cement Corp.
With the consolidation, Fortune Cement became the surviving entity and it will be renamed Consolidate Cement Corp. The exchange of shares will begin this month and will be completed by June.
Once completed, the company will have an equity value of P20.7 billion and a net debt of P7 billion.
The merger of the five companies was backed by English cement giant Blue Circle Industries.
The consolidated cement companies are expected to give stiff competition to the Phinma Group of Companies which last year also merged its three cement subsidiaries, Hi-Cement (HCC), Bacnotan Cement Corp. (BCC) and Davao Union Cement Corp. (DUCC) in its bid to streamline operations and cut costs.
Under the merger plan, HCC will be the surviving entity. As a result of the merger, Union Cement Corp., the cement holding firm of Phinma, will have a 65-percent stake in HCC. The merger was backed by Holder Bank of Switzerland which has 40-percent stake in the consolidated entity.
The other owners are Japan's Sumitomo Corp., Sumitomo Osaka Cement Corp. and FLS Industries of Denmark, the world's biggest cement equipment manufacturer.