In a disclosure to the Securities and Exchange Commission, WG&A chief financial officer Susan Valdez said the board authorized the corporation to secure a P1-billion loan from a syndicate of banks, headed by Citibank N.A.with the two new vessels to be acquired as collateral.
The board approved the purchase from Meimon Taiyo Co. Ltd. of Japan of two vessels for $16 million.
WG&A is the largest and most profitable shipping company in the Philippines. The company operates 23 vessels nationwide and is the largest provider of domestic ferry transportation in the Philippines on both the passenger and cargo business.
The firm was formed via a merger in 1996 of William Lines Inc., Carlos Gothong Lines Inc., and Aboitiz Shipping Corp.
WG&A reported a net income of P571 million last year on revenues of P6.7 billion and EBITDA of P1.7 billion. For the first half of the year, the company recorded an income from operations of P649 million, 11 percent higher than the P585 million last year.
A management reorganization is expected following the agreement signed by major shareholders of WG&A, allowing Aboitiz Equity Ventures Inc. to purchase the combined 61 percent holdings of the Chiongbian and Gothong Group in WG&A. ING Barings Bank is the financial advisor for the proposed transaction.
The proposed acquisition by the Aboitiz family of the combined interest of Gothong and Chiongbian in WG&A was a result of the compromise agreement they had entered into to settle their differences.
The deal, which is expected to close within 90 days, involves the sale of approximately 918 million shares held by Gothong and Aboitiz at PP3.98 per share or a total of P3.65 billion. Aboitiz will pay 50 percent of the purchase amount on closing date while the balance will be covered by a promissory note to the sellers payable over a five-year period with interest fixed at 12 percent and one year grace period on principal.
With the existing 31 percent ownership in WG&A, the Aboitiz Group will have over 92 percent of the company when the transaction is completed.