Metro Pacific to dispose of Negros Navigation

Metro Pacific Corp. (MPC) will dispose of its entire stake in domestic shipping line Negros Navigation Co. Inc. by distributing these shares in the form of property dividend to MPC stockholders.

In a disclosure to the Philippine Stock Exchange, MPC said its board of directors approved late last week the declaration of the property dividend representing MPC’s 74-percent stake in Nenaco and advances/receivables which are in the process of being converted to equity. Under a capital restructuring program started last February, MPC would increase its shareholdings in Nenaco to 95.4 percent.

MPC president and CEO Ricardo Pascua said the decision to dispose of the shares was arrived at due to the prolonged delay in finding a strategic partner, for the shipping line, whose unprofitable operations continue to weigh heavily on MPC’s bottom line.

He said since the MPC-led management has been able to deliver its commitment with respect to Nenaco’s restructuring, it can now relinquish control of the company and focus on its core property development, particularly in Bonifacio Global City.

The property dividend is still subject to the approval of the Securities and Exchange Commission and the requisite consents from the relevant creditors of MPC and Nenaco. Based on the plan, MPC will book the dividend to stockholders at a still to be determined ratio of their respective shareholdings on July 11. The record date for the transaction is set on July 16.

Last year, Nenaco remained in the red as it incurred a P693 net loss from operations, although this was lower than the P778 million loss in 1999.

Among the factors that contributed to the continued losses were the heightened competition brought about by the entry of the giant WG&A shipping line in its Bacolod home port; the contraction in the passenger and freight volume; as well as the doubling of fuel prices.

While company officials still see great potential over the long-term specially for the freight business which has been growing consistently and is not affected by the seasonality of the passenger side, MPC has been planning to put Nenaco on the auction block as it moves on more into the core business of property development.

Over the past two years, MPC sold off a number of its subsidiaries such as packaging firm Steniel Manufacturing, veterinary health unit Metrovet Inc., personal care products maker Metrolab Industries, and bottled water manufacturer Metro Bottled Water Inc.