Salim Group backs MVP’s strategy for First Pacific

The principal shareholders of Hongkong-based First Pacific Co. Ltd., led by the Salim Group, have thrown their full support to the company’s strategies moving forward, including one that will put the Philippine Long Distance Telephone Co. (PLDT) at the center of a regional expansion program.

In a statement furnished The STAR, Salim Group senior executive Benny Santoso said: "As principal shareholders of First Pacific, we stand behind the present board of directors and management of the company headed by Manuel V. Pangilinan as chief executive officer and are committed to supporting the strategies and plans the board decides to execute for First Pacific."

He added that they are now solely focused on moving the company forward and overcoming the challenges ahead. "With the original team that build First Pacific back in place, we are optimistic the best is yet to come," Santoso stated.

Pangilinan’s new strategy for First Pacific, which focuses primarily on building on its core assets namely PLDT and Indonesia-based Indofood, has been criticized by former First Pacific general counsel Ronald Brown who questioned the continued existence of the company given that it will be a "passive" investment company in the next few years in light of its original purpose to be an "active" investment and management company that adds value to its investments for its shareholders.

Brown noted that given the financial reality facing First Pacific, Pangilinan’s challenge as CEO is to convince First Pacific shareholders that it can be a viable company in the long-term by detailing the specific goals, implementation steps, and concrete timetable to achieve those goals.

He added that the huge gap between First Pacific’s share price and underlying net asset value (share price is at a 45-percent discount to NAV) will not close if it cannot add value for its investors, which according to Brown is unlikely as a passive investment company.

Brown, who resigned on April 30 (some say he was asked to resign), however acknowledged PLDT’s improved profitability and operational performance, both under Pangilinan’s management.

Pangilinan, concurrently president and CEO of PLDT, told The STAR that he and his group are encouraged by the strong performance of the PLDT Group and the rise in share price of PLDT and First Pacific recently. First Pacific owns 24.4 percent of PLDT and is its single biggest shareholder.

"It indicates both companies are making the right decisions and are moving in the right direction. I am committed to working harder with my First Pacific team to grow the company for our shareholders and the public that we serve," he said.

Pangilinan added that he is the first to acknowledge that there is so much to do, "so it’s best we leave the past behind and move forward. "

Brown, in a letter to The STAR, noted that First Pacific is currently experiencing negative cashflows, relying only upon Indofood’s dividends, which are insufficient to cover Hong Kong office corporate overheads and bank loan interest payments. First Pacific recently reported a net cash outflow of $24 million, citing a 64-percent drop in net cash generated from operations.

PLDT spokesperson Butch Jimenez said: "Mr. Brown’s doomsday scenario of First Pacific is noted. Every company has challenges, and First Pacific is not an exception. Mr. Pangilinan is not blind to the challenges First Pacific faces and is committed to hurdling all of them with his team."