MANILA, Philippines - Chemical Industries of the Philippines is in talks with two groups (one is a consumer-related firm while the other an oil and gas exploration player) to purchase the entire or majority of its shareholdings in subsidiary LMG Chemicals Corp., according to a top official.
CIP chairman Antonio Garcia said the company is reviewing two offers from both parties which he refused to name pending outcome of negotiations.
“The final price has yet to be agreed upon. We can sell may be only 90 or 80 percent depending on the final structure,” Garcia said.
Garcia also clarified that his younger brother, Ramon, does not need to veto the proposed transaction. Ramon was earlier reported to be reluctant to sell LMG at the price acceptable to Antonio.
Trading in shares of LMG and CIP were suspended beginning Feb. 6 upon their request pending completion of talks with potential investors.
Prior to the suspension, LMG and CIP were last traded at P6.05 and P137 each share, respectively.
CIP 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.
As early as 2010, LMG was offered to certain groups interested in taking over a listed shell company to serve as their backdoor ticket but nothing materialized.
LMG has a public float of only 0.2 percent, thus falling below the required minimum public ownership of at least 10 percent. The company informed the stock exchange in December that it was taking steps to comply with the said requirement.
Incorporated on April 20, 1970, LMG is primarily engaged in the manufacture and distribution of sulfuric acid and detergent sulfur. Sulfuric acid is used in car batteries, fertilizers, detergents, water treatment and wastewater treatment.
In 2007, LMG underwent a major corporate restructuring after transferring its assets and liabilities to its two wholly-owned subsidiaries, Chemphil Manufacturing Corp. and LMG Land Development Corp. It transferred its acid plant and tank farm properties to consolidate the acid plant and tank farm operations into individual holding companies for better management and monitoring.