MRC Allied, Lucio Tan Jr. in talks over possible tie up for power project

MANILA, Philippines - Publicly-listed MRC Allied Industries Inc. said it is in talks with a son of tycoon Lucio Tan for a possible joint venture that will involve the acquisition of a power plant.

In a disclosure to the Philippine Stock Exchange, MRC said negotiations with Lucio “Bong” Tan Jr. are ongoing and that the company would make the necessary announcements once everything has been finalized.

Stock market sources said Tan has acquired a controlling interest in MRC since last year to serve as corporate vehicle for his venture into the power business. MRC, however, denied this, saying the younger Tan is not a member of the board nor a shareholder of MRC as of Jan. 4.

MRC’s share price rose 12 percent to close at P0.75 on a volume of 97.56 million shares valued at P70.62 million. From only P0.36 in end-December last year, MRC has shot up to as much as P0.79 each share on rumors of a takeover. 

Sources said a group led by Tan is set to acquire a power project located in Northern Luzon which would be infused into MRC.

Last year, MRC approved to undertake a capital restructuring to reduce its deficit.

The program involves a decrease in the par value of MRC’s common shares from P1 per share to P0.20 with the corresponding decrease in its authorized capital stock from P500 million divided into 500 million common shares with a par value of P0.20 per share.

Following the decrease, MRC would raise its authorized capital stock of up to P9.5 billion or 47.5 billion shares at a par value of P0.20 per share. This is to facilitate additional infusion by potential investors.

On Sept. 23, 2008, Pacific Asia Capital Corp. and MRC entered into a deed of assignment wherein PACC would assume the latter’s liabilities of P328.50 million from various creditors in exchange for 3.625 billion shares or 87.88 percent of MRC.

In the third quarter of 2009, MRC incurred a net loss of P4.33 million compared with P34.85 million in the same period a year earlier.