Corporate News

Aboitiz Equity Ventures taps Japanese bank for $400-M loan to fund cement foray

Posted on August 25, 2015

ABOITIZ Equity Ventures, Inc. (AEV) has tapped a foreign bank for a $400-million (P18.7 billion) loan that will partly fund its venture into the cement business, the company told the stock exchange.

In a disclosure dated Aug. 20 but uploaded on the stock exchange Web site just yesterday, AEV said it “signed a facility agreement with The Bank of Tokyo-Mitsubishi UFJ, Ltd. to obtain a bridge loan” of up to $400 million.

“The proceeds of the loan will be used to partially finance AEV’s investment in holding companies for the purpose of the acquisition of the various Philippine assets and businesses of Lafarge S.A., including the cement production and other cement related businesses and services,” the disclosure read.

Last month, AEV formalized its joint venture with Irish building materials firm CRH plc for this foray into the cement business.

The listed conglomerate said then that venture will involve an investment of approximately P24 billion.

Full implementation and completion of the transaction is expected to be completed within the second half of this year.

AEV said earlier this year that the venture with CRH serves as “a solid opportunity” that will support the company’s thrust to provide a more diversified source of income for the conglomerate through infrastructure development.

Infrastructure will be an addition to the conglomerate’s four existing core businesses: power, banking, food, and property.

AEV CRH Holdings, Inc. earlier this month offered to purchase shares owned by locally listed Lafarge Republic, Inc.’s majority shareholders.

AEV CRH is a 60-40 joint venture company of AEV and Cement Roadstone Holdings, Inc., a domestic firm and wholly-owned subsidiary of CRH Philippines Holdings BV.

CRH Philippines is a Dutch company and an affiliate of CRH International.

The offer involved 649.08 million common shares, or 11.15% of the company’s total issued and outstanding capital stock, at a price of P10.26 per share.

CRH was granted on Jan. 31 the right to acquire 88.85% of Lafarge Republic, subject to certain requirements, as part of an agreement with the parent firms of Holcim Philippines, Inc. and Lafarge.

The execution of the agreement was subject to CRH finding a local partner and the completion of a tender offer. -- C.A.M.C. Feliciano