KGLI-NM withdraws offer to buy shares in Aboitiz unit

MANILA, Philippines - KGLI-NM Holdings has withdrawn from an agreement to purchase $30 million worth of common shares of publicly listed Aboitiz Transport System Corp. (ATS), citing current constraints in the debt market.

ATS informed the Philippine Stock Exchange yesterday that it has received written advice from Aboitiz Equity Ventures (AEV) and Aboitiz & Co. (ACO) that KGLI-NM will not proceed with the purchase of the ATS shares owned by AEV and ACO.

ATS said in view of KGLI-NM’s decision not to close pursuant to the term sheet and its notice dated March 31, 2009, the term sheet dated Dec. 19, 2008 as well as the memorandum of agreement dated Sept. 23, 2008 between AEV and ACO, on one hand, and KGLI-NM, on the other, are now deemed terminated.

It added that the P100-million option money paid by KGLI-NM to AEV and ACO (P82.88 million for AEV and P17.12 million for ACO) is also deemed forfeited.

KGLI-NM is a domestic company 60 percent owned by Negros Holdings and Management Corp. and 40 percent by KGL Investment BV, a Dutch company. KGL, which stands for Kuwait Gulf and Link Investment, is listed in the Kuwait Stock Exchange. It has investments in port and port-related business and other logistics-related businesses in the Philippines.

The purchase price was supposed to be based on a total equity value of ATS amounting to P4.5 billion or equivalent to P1.84 per share.  Based on the term sheet, the aborted sale was estimated to involve around 655.4 million common shares of ATS owned by AEV and 135.38 million common shares ATS owned by ACO computed at the prevailing dollar exchange rate, or a total of about 32 percent of the outstanding common shares of ATSC.

At these estimates, gross proceeds for AEV and ACO from the transaction were earlier estimated about P1.2 billion and P249 million, respectively. 

Had the sale pushed through, KGLI-NM, a company that was just organized in August, would have been the mother unit of both Nenaco and ATS, the operator of brands such as SuperFerry and 2Go.

It was earlier revealed that KGLI-NM is mulling the delisting of ATS from the Philippine Stock Exchange and instead list its own company, KGLI-NM Holdings Inc.

“Part of the option is to delist ATS, and if it happens the other option is to list the holding company in the future,” Negros Navigation Co. (Nenaco) chairman Sulficio Tagud Jr. earlier said. “It’s just a matter of right timing and market condition.”

“That will be our main jobs after KGLI-NM completes the buying out of the smaller shareholders. So we will delist it [ATS] first, and the listing [of KGLI-NM] will follow,” Tagud added.

According to Tagud, the original plan was for KGLI-NM to acquire the entire shares of AEV in ATS of about 77.1 percent, and ACO’s 15.93 percent for the total amount of about P5 billion. The remaining seven percent is owned by smaller investors, many of whom are also part of the Aboitiz family.

KGL has invested a $1.025-billion mixed-use aviation-oriented logistics complex called Global Gateway Logistics City in Clark Field.