HI sells 45% stake in First Malayan Leasing

The House of Investments, the holding company of the Yuchengco group has approved the sale of its financing firm to affiliate Rizal Commercial Banking Corp. (RCBC) for around P244 million.

In a disclosure to the Philippine Stock Exchange, HI said it is selling its 191.21 million shares or to 45.34 percent of First Malayan Leasing & Finance Corp. at P1.28 a share.

HI said its board also approved the payment of P35.57 million cash dividend to stockholders of preferred shares to be taken from the company’s unrestricted retained earnings as of end-December 2004. The dividends would cover the second and third quarters of 2003.

Entitled to receive dividends are stockholders as of April 11, 2005. The dividends are payable on May 5.

In the nine months ending March, HI posted a net income of P166.11 million, more than 15 times the P11.38 million reported the previous level. Revenues, however, fell to P6.29 billion from P8.37 billion due to a drop in automobile sales.

Automobile sales declined by 47.81 percent as the increase in automotive excise taxes drove prices of sport utility vehicles higher. "The price increases resulted in lower customer demand for new sport utility vehicles," HI said.

The drop in sales also resulted in a drop in costs of goods sold by P2.43 billion as lower sales volumes resulted in lower costs.

HI was incorporated in 1959 as an investment bank, the first to be organized in the country. Since investment banking had yet to be developed, the company decided to shift to intra-preneurial activities. HI is a leader in project development activities and joint ventures with internationally established companies.

Apart from consumer finance, HI controls and manages companies in construction and infrastructure, information technology and education.