MANILA, Philippines - Tanduay Holdings Inc. (THI) is looking to raise between P1.5 billion and P2.1 billion from a follow-on offering of shares to fund the ongoing expansion initiatives of subsidiaries as it aims to break into global markets.
In a filing with the stock exchange yesterday, THI said it is selling 398.139 million shares, owned by majority shareholder Tangent Holdings Corp., at P3.88 to P5.22 each.
At the end of the transaction, Tangent’s ownership of THI will go down to 87.4 percent from 97.1 percent.
THI anticipates that the fund-raising program will further strengthen its positioning in current stronghold areas and capture new markets in the Philippines and abroad. It is particularly looking at the US and China as potential sites for expansion.
The company will be launching new innovative and world-class products as part of its goal to become the number one seller of rum in the world.
PNB Capital and Invesment Corp. is the issue manager and bookrunner for the issue, along with Asian Alliance Investment Corp.
The offer price will be finalized on Dec. 1 while the offering will run from Dec. 5-9.
THI is the parent company of Tanduay Distillers Inc., the largest rum company in the Philippines and the second largest seller of rum in the world. Tanduay owns two of the largest distillery firms in the country – Asian Alcohol in the Visayas and Absolut Distillers in Luzon.
The company is earmarking P550 million to increase the distilling capacity of the Batangas-based Absolut Distillers from the existing 75,000 liters of ethyl alcohol per day to 175,000 liters with the addition of new distillation columns in 2012. The expansion also includes the construction of a 30,000-barrel alcohol ageing plant.
Another P390 million is also being set aside for the installation of a 750 million liters (ML) fully automated washing and bottling facility at the Negros plant. The project also includes the construction of six alcohol tanks with a capacity of 300,000 liters each. The new bottling line will add 20,000 cases daily to the plant.
The company is allotting P165 million for the refurbishment of the fire-damaged facilities in Laguna. The project entails the construction of a new laboratory, compounding building, 23 compounding tanks with a capacity of 1.4 ML, 22.5-ML million liter capacity alcohol storage tanks and a new 750-ML bottling line with a capacity of 14,000 cases per day. It is slated for full completion in January 2012.
About P200 million of the proceeds will also go to the conversion of a part of the Manila plant to a Heritage Museum which will showcase Tanduay’s history, products and processes. Other funds will be used to offer an early retirement package to existing daily employees at the plant and the complete relocation of operations to the Laguna plant.
About P165 million will be spent to upgrade the distillery plant at Pulupandan, which has been on temporary stoppage since 2009. The facility used to supply 30 ML a year to Tanduay’s rum production requirement.