Shareholders OK Cosmos merger with subsidiaries

MANILA, Philippines - Shareholders of Cosmos Bottling Corp. (CBC) have approved the merger of the company with its wholly-owned units Cosmos Visayas Bottlers Inc. and Cosmos Bacolod Bottlers Inc.

 In a disclosure to the Philippine Stock Exchange, CBC said it would emerge as the surviving corporation following its merger with the two other companies effective July 31.

CBC said the merger is still subject to the approval of the Securities and Exchange Commission (SEC).

At the same time, CBC disclosed that its majority shareholder, Philippine Bottlers Inc., was willing to buy out the shares of minority shareholders at P3 per share, the last traded price of the softdrinks firm on May 23, 2006.

Listed on the PSE in December 1994, CBC is the first softdrink manufacturer in the country. It is owned by The Coca-Cola Company following the latter’s purchase of the shareholdings of San Miguel Corp. in Coca-Cola Bottlers Philippines Inc. and its assets and subsidiaries.

The company was originally established as Manila Aerated Water Factory engaged in the manufacturing, marketing and distribution of softdrinks.

Among its branded products include Pop Cola, Sarsi, Cheers Lemon, Orange and Ruby, Jaz Cola and Sparkle. These products are manufactured using a combination of imported and locally produced ingredients. Sarsi and Sarsi Light are directed at the Class A and B markets while Pop, Jaz, Sparkle and Cheers brands are primarily marketed to the Class C and D segments.

CBC incurred a net loss of P338 million last year, significantly lower than the P4.092-billion loss recorded in 2007 mainly due to minimal operating expenses and impairment charges.

The company’s consolidated net sales revenue fell 19 percent to P7.89 billion even as sales volume went up two percent. 

The decline in sales volume was attributed to the standard pricing scheme with Coca-Cola Bottlers Philipines Inc. as the sole distributor of its products nationwide.

Consolidated cost of sales similarly decreased to P7.683 billion from P7.89 billion which was wholly cushioned by minimal overhead costs resulting from the cessation of its manufacturing operation.

Selling and marketing expenses on a consolidated basis drastically dropped to P102 million from P1.112 billion due to the distributorship agreement entered into between the company and CCBPI wherein starting September 2007, CBC transacts solely with CCBPI.