WG&A sets buyback of P2.5-B preferred shares

The country’s largest shipping firm, WG&A, is setting aside at least P250 million annually to buy back within the next six years some P2.5 billion worth of redeemable preferred shares (RPS) it issued late last year.

WGA corporate information officer Susan Valdez told the Philippine Stock Exchange that the company’s board of directors has approved the redemption program, to be coursed through the trading floor of the PSE, at a price of P6.67 per RPS.

Last December, WG&A issued the RPS as stock dividend, taken out of the company’s existing additional paid-in surplus at the ratio of one RPS for every four common shares held by the stockholders.

Worth approximately P2.5 billion, WG&A said it plans to partially redeem the RPS as quickly as possible, depending on the company’s cash flow and financial condition, citing that it would be beneficial to the stockholders in the long run.

Based on the terms of the redemption, the company may redeem six of every 10 RPS held by stockholders at a minimum redemption price of P6.67 per share. At the stock market, WG&A shares currently trade at P2.55 each.

WG&A is over 91 percent owned by the Cebu-based holding firm Aboitiz Equity Ventures Inc. Aboitiz bought out its former partners last year at a price of P3.98 per share, or a total of P3.65 billion.

WG&A operates 23 vessels nationwide and is the largest provider of domestic ferry transportation on both the passenger and cargo business. In the first semester of 2002, its operating profit reached P649 million, up to 11 percent from the previous year’s level. Net income amounted to P571 million on revenues of P6.7 billion.

To be renamed Sentina Inc., WG&A said it intends to acquire two more vessels worth a total of $16 million to augment its present fleet and expand its services for both passenger and cargo handling.

The company’s board also approved the direct purchase of the vessels from Japan’s Meimon Taiyo Ferry Co. Ltd., an affiliate of the global shipping giant Mitsui O.S.K. Lines Ltd.