Chemphil to decide next week on LMG Chemical buyout offer

MANILA, Philippines - Publicly-listed Chemical Industries of the Philippines (Chemphil) will decide next week on an offer it received to purchase its entire shareholdings in subsidiary LMG Chemical Corp., the company’s top official said.

Chemphil chairman Antonio Garcia told The STAR that they have formally received the offer yesterday. “We are still evaluating it and hopefully we will decide on it next week,” he said.

There has been a rise in LMG prices the past few weeks due to speculations over the negotiations regarding the sale by Chemphil of its stake in LMG, also a publicly-listed company.

At a special meeting of Chemphil’s board of directors, it approved and confirmed management’s decision to temporarily suspend the trading of the company’s shares in the Philippine Stock Exchange.

Garcia, however, refused to give any further detail regarding the talks, including the identity of the prospective buyers.

An earlier offer by local holding company Sonato Inc. for Chemphil’s 99.8-percent stake in LMG was placed at P353.67 million or around P1.83 per share. There was a succeeding offer from Sorsogon-based real estate company LKY Development for P1.77 a share but LKY defaulted on its commitment to buy the block.

LMG’s net sales in the third quarter of 2011 reached P1.7 million while net income was at a mere P 61,892 .

Last year, the company said it will continue with its trading activities. It said it is in serious talks with suppliers of chemical and other chemical products that could be offered in the domestic market. Some of these materials are caustic soda, various sulphate products and other water treatment chemicals.

Chemphil and its subsidiaries sell their products mainly to detergent, beverage and car battery manufacturers, firms in the food, ceramics and paper industries, water concessionaires and the consumer market for its personal care products.

Chemphil’s consolidated revenue for the three months ending Sept. 30, 2011 amounted to P80.4 million, 13 percent lower than 2010’s third quarter consolidated revenue of P92.8 million.

The company incurred a consolidated net loss of P10.4 million in the third quarter of 2011 versus the P20 million consolidated net income in the same period of the prior year.