AUTOMOBILE SALES notched another record high in November, the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA) reported on Wednesday, adding that the latest tally brought the entire industry closer to a 410,000-unit sales projection for the entire year.
CAMPI-TMA data showed vehicle sales totaling 34,465 units for November alone, up 10.3% from the 31,258 units sold a year ago.
The 11 months to November saw both groups selling 336,226 units, 3.27% more than the year-ago 325,569 sales.
Commercial vehicle sales, which contributed 72.29% to the total in November, grew 12.9% year-on-year to 24,914 units, while passenger cars, which accounted for 27.71%, increased by 3.8% to 9,551 vehicles.
Year-to-date, commercial vehicle sales, which contributed 70.27% to the total, went up 4.7% to 236,275 units, while passenger cars, which made up 29.73%, edged up just 0.1% to 99,951 vehicles.
The groups said in a news release that the nearly flat 0.2% month-on-month increase from October’s 34,397 units sold “is still a positive sign of… sustained demand” and that November saw “the highest monthly sales for the industry so far this year.”
It was also the second straight month that CAMPI and TMA posted record-high sales, they added.
“We are continuously working double time to achieve the industry’s overall sales target of 410,000 units which we believe remains achievable,” the release quoted CAMPI President Rommel R. Gutierrez as saying.
CAMPI and TMA account for 89% of the projection, while the Association of Vehicle Importers and Distributors, Inc. accounts for 11%. — JPI
PEPSI-COLA PRODUCTS Philippines, Inc.’s biggest shareholder wants to increase its stake.
By Denise A. Valdez,Reporter
PEPSI-COLA Products Philippines, Inc. (PCPPI)’s biggest shareholder Lotte Chilsung Beverage Co. Ltd. wants to increase its stake in the company, which is seen to possibly lead to an eventual delisting from the local bourse.
In a tender offer report by Lotte submitted to the stock exchange Wednesday, the food and beverage company said the Korean conglomerate wants to buy up to 2,134,381,838 of its common shares through a tender offer to all shareholders except Lotte Corp. and members of the board of directors.
Lotte is offering to buy the shares at a tender offer price of P1.95 each. The shares are equivalent to 57.78% of PCPPI’s total issued and outstanding capital stock as of end-September.
PCPPI has an authorized capital stock of P750 million as of end-November, which is divided into five billion shares of common stock priced at P0.15 each.
Based on the tender offer report, the offer will begin at 9:00 a.m. today and will last until 5 p.m. on Jan. 15.
Lotte said it views the tender offer as “a strategic initiative to acquire a significant economic interest in the company.”
On the possibility of delisting PCPPI, Lotte said it has no plans to voluntarily delist the firm from the Philippine Stock Exchange (PSE). But it noted if the tender offer is accepted, the company’s public ownership may shrink to below 10%, which is the current minimum public float in the Philippines.
“In the event that PCPPI will no longer be compliant with the minimum public ownership requirement following the completion of the Tender Offer, trading of PCPPI shares will be automatically suspended by the PSE for a period of six months and, if during the said period, PCPPI is still not able to comply with the minimum public ownership requirement, then delisting will follow thereafter,” it said.
“If PCPPI is delisted, its common shares will no longer be traded on the PSE and this could affect investors’ ability to liquidate their investments. Also, any capital gains generated from their subsequent sale or transfer will be subject to the prevailing capital gains taxes. Subsequent sale or transfer will also be subject to documentary stamp tax,” it added.
Following the announcement, PCPPI voluntarily suspended the trading of its shares at the stock exchange yesterday. The trading suspension will be lifted at 1:40 p.m. today.
As of its end-September regulatory filing, PCPPI said Lotte had a 42.22% stake in the company, accounting for the biggest share. The other shareholder is Quaker Global Investments B.V. (25%) which is registered in the Netherlands.
In a separate disclosure yesterday, PCPPI said it has successfully closed its franchise deal to manufacture the local version of snack brand Cheetos.
This follows the company’s announcement in September that it wants to focus on its beverage business through its exclusive relationship with PepsiCo, Inc.
“Successfully reaching this agreement allows PCPPI to advance and renew its focus and commitment to a more sustainable future, while optimizing and strengthening the production and distribution of carbonated and non-carbonated beverages to millions nationwide…,” it said in a statement Wednesday.
Among the beverages PCPPI owns are Pepsi, Mountain Dew, 7-Up, Mirinda, Mug, Gatorade, Tropicana, Lipton, Sting, Premier, Milkis and Aquafina.
Despite terminating the franchise for Cheetos, the company noted it will still import the said product, along with other snacks such as Lays, Doritos, Ruffles, Red Rock Deli, Fritos, Tostitos, Sunchips, Smartfood, Munchies and Rold Gold.
Before the suspension of its trading, shares in PCPPI closed Tuesday’s session at P1.40 apiece.
YIELDS ON term deposit mostly went lower with lenders awaiting the upcoming holidays and the policy stance of the central bank for its final policy meeting this Thursday.
Tenders for the central bank’s term deposit facility (TDF) totaled P181.538 billion on Wednesday, a bit higher than the P180 billion on offer, according to data from the Bangko Sentral ng Pilipinas (BSP).
The week’s tenders also surpassed the P175.528 billion in bids the BSP received last week for the P170 billion placed on the auction block.
Banks’ tenders for the seven-day term deposits amounted to P66.835 billion, going beyond the P60 billion auctioned and also higher than the P56.572 billion in bids seen last week.
Yields for the one-week paper were seen from 4.125% to 4.4%, a thinner band compared to last week’s range of 4.125-4.45%. This resulted in an average rate of 4.304%, higher by 2.06 basis points (bps) from last week’s 4.2834%.
For the 15-day papers, total bids hit P69.993 billion, higher than the P60 billion auctioned and also beating the P67.388 billion bids seen last week.
Lenders asked for returns ranging from 4.3% to 4.4055%, a narrower margin compared to the 4.235-4.4188% range last week. The average rate for the two-week deposits was at 4.3249%, dipping by 0.6 bp from the 4.331% logged on Dec. 4.
Meanwhile, 28-day deposits fetched tenders totaling P44.71 billion, which did not fill the P60 billion offered by the BSP and also lower than the P51.568 billion in tenders seen last week for the P50 billion placed on the auction block.
Rates for the one-month papers were seen from 4.29% to 4.49%, a slimmer margin compared to last Wednesday’s 3.5-4.4948%. This resulted in an average rate of 4.3496%, lower by 0.26 bp from last week’s 4.3522%.
The TDF is the BSP’s main tool to shore up excess liquidity in the financial system and to better guide market interest rates.
Economists said the upcoming holidays and the Monetary Board meeting scheduled this Thursday may have affected TDF yields this week.
“The bias toward the seven-day issues may mean that financial institutions are already anticipating their customers’ needs as the holidays are fast approaching. It may also stress the growing liquidity in the market as already seen in last month’s M3 (liquidity),” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail.
He added that the bias towards seven-day papers may continue as the market prepares for the upcoming holidays.
Latest data from the BSP showed domestic liquidity grew by 8.5% year on year to P12.1 trillion in October, picking up from the 7.7% growth pace in September. M3 grew by 0.9% on a month-on-month basis.
Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the TDF results to a possible cut in interest rates for the last time in 2019.
“Possible cut in the local policy rates on the next monetary policy-setting meeting amid relatively low/benign inflation data despite some slight uptick recently to 1.3% in November 2019, mathematically amid diminishing inflation base/denominator effects, also still support the latest slight declines in BSP TDF auction yields,” he said in an e-mail.
The BSP has reduced benchmark interest rates by a total of 75 bps in 2019, which partially counteracted the 175 bps worth of rate hikes in 2018 amid a multi-year inflation environment that peaked at 6.7% in September and October.
This has decreased key policy rate to four percent for the overnight reverse repurchase facility, while overnight deposit and lending rates were reduced to 3.5% and 4.5%, respectively.
The BSP’s Monetary Board will meet for its eighth and last policy meeting for the year this Thursday. — Luz Wendy T. Noble
METRO PACIFIC Hospital Holdings, Inc. (MPHHI) is taking a majority stake in the operator of a 100-bed hospital in Butuan, Mindanao.
Its listed parent Metro Pacific Investments Corp. (MPIC) told the stock exchange on Wednesday that MPHHI has completed a share purchase agreement with three families owning 576,257 shares in Santos Clinic Inc. (SCI).
The shares represent 67% of SCI, which owns and operates Manuel J. Santos Hospital (MJSH) in Mindanao.
MPHHI bought the shares from the Santos, Vesagas and Villareal families, which are heirs of the hospital founder Manuel J. Santos. The company offered to buy their shares at P563.77 each.
“We, the scions of Dr. Manuel J. Santos, are very pleased and excited to partner with MPHHI, the largest private hospital network in the country, and we welcome the MVP Group to Butuan City,” family representative Terence “Ompet” S. Vesagas was quoted in the statement as saying.
“We chose a partner that we know preserves and enhances the legacy of the hospitals in its portfolio… We look forward to increasing our footprint in Northeastern Mindanao and further continuing the mission of my late grandfather,” Mr. Vesagas added.
With the new Mindanao-based hospital, MPHHI has increased the number of hospitals in its portfolio to 15, joining the likes of Manila Doctors Hospital, Asian Hospital and Medical Center, Makati Medical Center, Cardinal Santos Medical Center and Davao Doctors Hospital.
“We thank the Santos, Vesagas, and Villareal families for allowing us to invest in their esteemed hospital, and for their continued active participation in both the Board and management of SCI,” MPHHI President and Chief Executive Officer Augusto P. Palisoc, Jr. was quoted in the statement as saying.
Earlier this week, MPHHI also announced completing the P35.3-billion investment of United States-based Kohlberg Kravis Roberts & Co. and Singapore fund GIC Private Ltd. in the company.
Part of MPHHI’s expansion plans is growing its hospital portfolio, subsidiaries, associates and joint ventures.
MPIC is one of three Philippine subsidiaries of Hong Kong’s First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains an interest in BusinessWorld through the Philippine Star Group.
Shares in MPIC at the stock exchange fell 48 centavos or 13.08% to P3.19 apiece on Wednesday. — Denise A. Valdez
QUANTUM COMPUTERS aim to carry out tasks in just a few minutes that would take today’s best conventional computers thousands of years. But in nearly every photograph of the devices, there’s a tangle of wires in the background connected to equipment that controls the quantum computer.
Intel Corp. on Monday announced a chip that it hopes will change that. The Santa Clara, California-based chipmaker announced a chip called “Horse Ridge” that is designed to take all the work being done by the wires and shrink it down to a chip and electronics about the size of a tea cup saucer.
Quantum computers remain years away from everyday use but have drawn the interest of major technology companies. In October, researchers at Alphabet Inc.’s Google said they had created a machine that can outpace conventional computers. Other major technology firms such as International Business Machines and Microsoft Corp. are also pursuing the technology.
Intel has two quantum efforts, each examining a different way of building the core of a quantum computer. That central part of a quantum machine uses what are known as “qubits.”
In many quantum computers, the qubits must be kept very cold, near the temperatures where atoms stop moving, inside a special refrigerator. That makes it very difficult to connect wires to the qubits to send and receive information. Most of those wires and additional electronics have to sit outside the special refrigerator.
Intel said its chip — which is named for one of the coldest spots in the US state of Oregon, where many of its factories are located — is designed to be able to sit inside the quantum refrigerator. The company hopes the chip will make its quantum computers more practical to produce in the future.
“Intel recognized that quantum controls were an essential piece of the puzzle we needed to solve in order to develop a large-scale commercial quantum system,” Jim Clarke, Intel’s director of quantum hardware, said in a statement. — Reuters
ANALYSTS are divided about a February rate cut by the Reserve Bank of India. — REUTERS
BENGALURU — A February Reserve Bank of India (RBI) rate cut is on a knife’s edge, with just under half of economists polled expecting easing at that meeting, and is highly likely by the middle of next year, according to a Reuters poll.
After slashing the repo rate by 135 basis points (bps) this year to 5.15%, the RBI cited concern about near-term inflation when it took analysts and markets by surprise and kept it unchanged last week, pushing stocks and the Indian rupee lower.
But the central bank acknowledged there was room for further cuts.
With economic growth at its weakest in over six years, 49% of economists, 33 of 67, in a snap poll taken after the Monetary Policy Committee’s (MPC) decision, predicted that would be a temporary pause and another cut would come in February.
The others expected no move at the Feb. 4-6 meeting.
“The MPC has retained its ‘accommodative’ policy stance, which suggests that this is a pause rather than an end to the loosening cycle,” said Darren Aw, Asia economist at Capital Economics.
A firm majority, over 80% economists said the RBI will cut rates by end-June, with the median forecast for a 25-bp trim to 4.90%, and then stay on the sidelines for the rest of the year.
“Timing the next RBI move has become precarious after it chose to abstain from additional front-loading, despite a sharp growth downgrade and below-target inflation forecast with balanced risks,” said Abhishek Upadhyay, senior economist at ICICI Securities.
“We suspect higher inflation and fiscal risks could push any further cut to the next fiscal year, perhaps in June with the risk that we have already reached the end of the rate cut cycle.”
When asked what the central bank’s next move should be, instead of what the RBI will deliver, all but three of 45 economists also said a cut, with the median of those responses recommending 25 bps.
And in response to a separate question, 35 of 52 economists said they were confident the RBI would cut rates soon. The remaining 17 contributors said they were not confident, mostly citing expectations for elevated inflation.
A separate Reuters poll of 52 economists taken Dec. 5-10 predicted inflation rose last month to over a three-year high of 5.26% from October’s 4.62%, largely driven by a continued surge in vegetable prices, particularly onions — an important ingredient in the kitchens of more than 1.2 billion Indians.
“While multiple data shows lack of inflation pressure in the economy, onion prices — within the food component — have been the biggest driver of headline inflation and this cannot be influenced by monetary policy actions,” said Kunal Kundu, India economist at Societe Generale.
But even though inflation has turned up recently, the RBI took many forecasters and traders off guard at the December meeting as policy makers had given no signal after a rapid-fire succession of cuts this year it was about to pause.
When asked if that decision had damaged the RBI’s credibility, 70% — 39 of 53 — of economists said “not at all.” Eleven contributors said it had “a bit” and three said “a lot.”
“In terms of providing monetary policy accommodation they feel that they are already doing enough right now and they want to see more transmission before they cut more if they have to,” said Sakshi Gupta, senior India economist at HDFC Bank.
“In this cycle, they have already delivered a significant amount of cuts and they probably want to wait and watch what is happening with inflation before they cut more.” — Reuters
CEBU LANDMASTERS, Inc. will invest P10 billion for its Davao projects. — CEBULANDMASTERS WEBSITE
By Carmelito Q. Francisco,Correspondent
DAVAO CITY — Cebu Landmasters, Inc. (CLI) is investing about P10 billion for its three projects in the city next year, its top official said yesterday.
At the inauguration of the showroom of the Paragon Davao, Jose Franco B. Soberano, CLI executive vice-president and chief operations officer, said the money will be used for the developments of the Paragon Davao, the Davao Global Township (DGT) and the Lyceum of the Philippines University (LPU) township.
Both the Paragon DGT are the partnership of the company with the landed YHES, Inc., the company of one of the biggest property owner clans in the city, the Huang-Villa Abrilla-Tan. Their first partnership was MesaTierra Garden Residences, also a condominium project.
On the Paragon Davao, the company is putting up its second of the seven towers after selling about 90% of the 554-unit first tower, or about P2 billion, said Mr. Soberano.
At the 25-hectare DGT, the company is investing in the development of the first phase that will include setting up access roads and a retail component which will offer a “unique retail experience (that is) very homegrown, meaning very upscale but affordable by all,” he said, adding that the component will be modeled after a mall in Los Angeles, USA which is “hayahay (comfortable).”
Another part of the first phase development of the DGT, which used to be a golf course, will also include a civic center whose designer will be a top architect that will make the project “a cultural museum for Davao.”
Mr. Soberano also told BusinessWorld part of the money will also be used in the development of another access road and the first residential tower of the two-tower LPU township.
Saying the company has enjoyed fast takeup of its projects, Mr. Soberano said that its experience in real estate development as well as in its partnership with the YHES, Inc. has contributed to its better than expected revenue.
“Our locations are best in class locations and future proof,” he said, explaining that the locations are marketable as they are closer to places of work and schools.
PLAYRIX HOLDING Ltd., a mobile-game developer that made billionaires of its Russian founders, has bought into about a dozen studios to take on the likes of Activision Blizzard Inc. and Electronic Arts Inc.
Brothers Igor and Dmitry Bukhman said in an interview that by 2025 they want Playrix’s sales to catch up with those of the US gaming giants. Over the past year they’ve spent more than $100 million on acquisitions and are planning to more than quadruple their portfolio of titles from about four that are available now.
While the gaming industry is awash in investors from KKR & Co. to Zynga Inc., the Bukhman brothers are determined to go it alone. They told Bloomberg News in April that while Wall Street dealmakers such as Goldman Sachs Group Inc. had been in touch, they wanted to expand the business themselves.
Since then, the brothers haven’t been persuaded of the merits of giving up control over Playrix in favor of a bigger pot of cash to spend. They prefer to leverage their understanding of the industry to act as a consolidator and nurture smaller players.
“Many firms are seeking acquisition targets to add to their revenue and show growth to investors,” Igor said. “We don’t have this pressure and are taking a more long-term approach — we are helping our portfolio companies to grow. We are sharing our experience and playing a role in their growth.”
Playrix said their current year revenue is likely to reach $1.5 billion, as much as 30% more than the previous year’s, from sales of existing games including Gardenscapes. It was the ninth-biggest publisher last year, according to independent gaming data provider App Annie.
NEW TITLES
The Bukhman brothers are betting their new titles, to be released over the next two years, will push sales into the realm of rivals such as Activision, which reported $7.5 billion in revenue for 2018.
“Within five years, we are seeking to join the same league as Activision Blizzard or NetEase Inc., but in the European region,” said Igor, without specifying a revenue target.
Playrix’s purchases include studios in Ukraine, Serbia, Russia, Croatia and Armenia, and the 600 people added boost its headcount by more than 50%. The investments range from 30% holdings to controlling stakes in companies that will continue to operate independently. These include Nexters, based in Cyprus and one of Europe’s 10 top-grossing game developers, and Vizor Games, based in Belarus.
The brothers are valued at about $1.4 billion each by the Bloomberg Billionaires Index. They landed in the rankings by creating a new variety of match-3 games, which involve completing rows of at least three elements to progress through an animated storyline. The latest acquisitions will allow expansion into gaming genres such as hidden object and simulation.
The mobile gaming business is set to exceed $68 billion in revenue this year, according to researcher Newzoo, and have been attracting attention from investors. Playrix will have to compete against these deep-pocketed players if it’s to achieve its goals.
Zynga acquired Finnish developer Small Giant Games for $560 million last year, while Israeli Playtika Ltd. bought Germany’s Wooga and Austria’s Supertreat. KKR-backed AppLovin invested in Belarusian developer Belka Games and two other firms in September.
“Capturing lightning in a bottle twice is the true challenge for a creative firm,” said Joost van Dreunen, managing director of SuperData, Nielsen’s game research arm. “With the popularity of Gardenscapes, Playrix has finally established itself as a force to be reckoned with. However, to build a legacy it will need to repeat this trick.” — Bloomberg
PHILIPPINE BANKS will fare well despite the falling interest rate environment, which has been the trend in most Asian countries, according to Moody’s Investors Service.
In its report titled “Banks — Asia Pacific 2020 Outlook,” the ratings agency also noted that banks in the Asia-Pacific region may feel the strain from their exposure to China which has seen its economy slowing down, as well as the Asian giant’s continuing trade war with the United States.
“We expect profitability to remain stable for Philippine banks. While the lower interest rates are negative for margins, the impact will be offset by the lowering of reserve requirements,” Srikanth Vadlamani, vice-president and senior credit officer at Moody’s Investors Service said in an e-mail on Wednesday.
“Also, the easing liquidity conditions will benefit especially smaller banks, because they will see a greater lowering of funding costs,” Mr. Vadlamani said.
Local banks have already witnessed 400 basis points (bps) worth of reserve requirement ratio (RRR) reductions in 2019. This has put RRR for big banks at 14%, five percent for thrift banks, and three percent for rural banks.
The reserve ratio for non-bank financial institutions with quasi-banking functions has also been reduced to 14%.
Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno has pledged to decrease big banks’ reserve requirement to the single digit level by the end of his term in mid-2023, making it at par with neighboring countries’ ratios.
In the region, major headwinds are faced by Asia-Pacific banks arising from the 17-month long trade war from the world’s two biggest economies. Its spillover effects have dented economic activity, trade, and investor confidence in Asian countries, according to Moody’s.
The US and China are currently stuck on securing a phase one deal and on whether another round of about $160 billion worth of tariffs on Chinese goods will be applied by Dec. 15.
Despite this, Moody’s said the Philippines’ low exposure to China compared to other economies in the region will help banks weather external headwinds.
In its report, Moody’s cited that among those with the biggest exports to China as a percentage of their gross domestic product (GDP) are Hong Kong (54%), Australia (30%), Korea (25%), Taiwan (23%), New Zealand (22%) and Japan (19%). These are in industries such as commodities, trade, electronics, and machinery.
In the ASEAN region, Vietnam has the largest exports to China as a percentage of GDP at 15%. Meanwhile, Singapore, Indonesia, and Malaysia are at 14% while Thailand is at 13%.
Moody’s said the Philippines has the least exports to China as a percentage of GDP at 12%, with banks’ exposures mostly in the electronics sector. This, according to the ratings agency, is to the country’s advantage compared to its peers in the light of the ongoing trade war.
“Philippine banks will see the impact of the US-China trade war largely by way of second order effects, because they do not have a high exposure to sectors directly impacted by the trade tensions,” Mr. Vadlamani said.
“The main second order effect is through the slowing of economic growth, which will affect bank borrowers,” he added.
The Philippine economy expanded by 6.1% in the third quarter, growing faster than the 5.6% and 5.5% GDP growth logged in the first two quarters. This brought the average growth for the three quarters to 5.8%, which is still below the government’s minimum 2019 growth target of 6%.
Mr. Vadlamani said the country’s growth will remain “fairly robust” compared to neighboring states, thanks to the “high level of investments in capital expenditure by the private sector and government.”
“These investments should act as a buffer for the banking sector from the impact of the trade war,” he said. — Luz Wendy T. Noble
PUTIEN’s Fried Heng Hwa Bee Hoon, a noodle dish with seafood and vegetables tucked within its strands that tastes remarkably light.
THE PLANET’S seasons shape our lives, and one might think that this is limited to agriculture, but think about how they alter your wardrobe, travel, and work plans. Those powers are heavily reflected in Putien’s menu, which changes according to the seasons. Perhaps it’s that respect given to the planet’s axial spin that is the reason the restaurant has consistently earned one star in Singapore’s Michelin Guide for four years straight.
The restaurant was founded by Fong Chi Chung, and the dishes are memories of his hometown Putian in Fujian province. The Philippine franchise of Putian, which opened last month, was made possible by the Vikings Group, which also opened the Philippine franchise of Taiwanese chicken chain Monga last month.
Filipinos are more familiar with the robust tastes of Cantonese cuisine, and Charles Lee, Vikings Group Marketing Director said, “I could say that Fujian cuisine is not as heavy — the taste is not as heavy,”he said.
BusinessWorld got a taste of this with the Fried Heng Hwa Bee Hoon, a noodle dish with seafood and vegetables tucked within its strands. It did taste remarkably light, and gave one the feeling of being full — but never exceedingly so; this even after three small bowls. We paired this with the Fragrant Herbal Chicken, which tasted almost like medicine — in a good way. It’s as if it had absorbed a potion that made one’s soul feel lighter, but we got over that quickly enough. We had the deep-fried pork trotters next, which were delicately spicy and had a nice inviting texture as you eat them with plastic gloves: it was like holding the hand of a jolly fat man.
The seasonality of Putien’s menu, part of its raison d’être, are followed strictly in the Philippine franchise, according to Mr. Lee. “We are strictly required by HQ.” As for the ingredients, some are sourced locally, while some are from Singapore, and some come straight from Fujian province.
As we’ve noted, Filipino palates are more familiar with Cantonese cuisine: perhaps because the people from that region have a stronger presence globally, thanks to large waves of migrants from the province of Guangdong. Mr. Lee, however said, “At home, we eat a lot of Fujian cuisine.” His family is from Fujian province, and the region is very well-represented in the Philippines: the Gokongweis, the Cojuangcos, the Sys, the Tys, and the Tans all lay claim to ancestors from Fujian province. “This type of cuisine resonates with them,” he said about Chinese-Filipinos of Fujian ancestry. We asked Mr. Lee how many Fujian-influenced restaurants are in the city at present, and he said, “I don’t have a number for it. And you know why? It’s not as heavily familiar. Cantonese is still the go-to comfort food.
“We’re banking on the fact that it’s a one-Michelin Star brand,” he said.
Besides, the market for Fujianese food is different — it isn’t about familiarity. Keeping in mind the changing seasons, Mr. Lee said about Putien’s customers, “They look for things that are always new, always changing; something different.”
As for the Vikings Group, Mr. Lee said that they plan to open a Filipino-themed food hall and a Korean barbeque concept, as well as a spa, in the near future. — Joseph L. Garcia
PHILIPPINE TELEGRAPH and Telephone Corp. (PT&T) on Wednesday said the Court of Appeals (CA) has ordered the National Telecommunications Commission (NTC) to recompute the amount of supervisory and regulatory fees (SRF) that the company has to pay.
In a disclosure to the stock exchange, PT&T said: “On 11 December 2019, PT&T received a decision rendered by the Court of Appeals which set aside the order of the NTC on the amount of the SRF that PT&T is obligated to pay.”
It added: “The Court of Appeals likewise remanded the case to NTC for the recomputation of the correct amount of SRF to be paid by PTT.”
PT&T filed last year a petition with the CA questioning the amount of SRF imposed on the company by the NTC.
“While PTT is required to pay an annual SRF, the amount PT&T is being required to pay under the 28 September 2018 Decision of the NTC is inaccurate for the same was computed by the NTC based on its erroneous assumption of PT&T’s paid-up capital,” the company said in a disclosure to the stock exchange in October last year.
In a Sept. 28 decision, the NTC asked PT&T to pay a total SRF of P444 million — broken down as P330 million for the period from 2002 to 2015; and P114 million from 2016 to 2017. It said the SRF for the 2002 to 2015 period was based on PT&T’s paid-in capital of P8.712 billion, as computed in a resolution it released on March 31, 2017.
Although it acknowledged that PT&T’s annual reports showed the additional paid-in capital is P2.054 billion, the NTC said it could not overturn its own decision because the company failed to file an appeal within 15 days from its issuance.
On Feb. 28, 2018, the company filed an appeal with the NTC to recompute the SRF, almost a year after the resolution was released.
As for the SRF from 2016 to 2017, the NTC said this was based on PT&T’s paid-in capital of P10.766 billion, as indicated in its March 31, 2017 decision. — Arjay L. Balinbin
XEROX Holdings Corp. believes its proposed HP Inc. takeover would create as much as $1.5 billion in potential revenue growth, according a presentation to HP’s shareholders made public Monday.
The printer maker outlined its case for a tie-up between the companies, arguing the combined firm will be worth about $31 a share to HP investors on a pro-forma basis. The merged entity will generate more than $4 billion in free cash flow in the first year before taking any synergies into account, according to the presentation, confirming a report in Bloomberg News.
“The value of the transaction goes beyond economics. In consolidating industries, first movers not only win but also have an opportunity to reshape the competitive landscape in an enduring way,” John Visentin, Xerox’s chief executive officer, said in the presentation.
Xerox has already said it believes the combination would create roughly $2 billion in synergies, which it argues could be achieved in 24 months. Those savings could be achieved through streamlining their operations by reducing the number of suppliers the combined company would use, cost reductions on information technology and reducing its real estate footprint, among other measures.
The presentation for HP shareholders goes further, saying a merger of their operations would allow cross-selling and a unified platform for clients. That could yield an estimated $1 billion to $1.5 billion revenue growth, Xerox said.
To get to this amount, Xerox says it has a three-year roadmap that includes generating $540 million to $750 million from pitching complementary products to existing clients, $50 million to $100 million from manufacturing and distribution efficiencies and $350 million to $400 million from integrating HP products into Xerox’s office-as-a-service offerings.
It also said there could be $300 million to $400 million in growth from Xerox’s services and software and $150 million to $300 million from offering Xerox’s leasing options to HP customers. A representative for Xerox declined to comment, while a representative for HP couldn’t immediately comment.
HP last month rejected an unsolicited, cash-and-stock offer from Xerox worth $22 per share, arguing it undervalued the company and citing concerns about the health of its smaller rival’s business. Xerox said it planned to take its case straight to HP’s shareholders after the Palo Alto-based hardware maker refused to grant the mutual due diligence it requested.
The presentation to be released publicly Monday is the first step in that effort, and Visentin will start meeting some HP shareholders this week to sell the plan. Xerox has asked for three weeks of mutual due diligence in order to validate its case for a tie-up, noting in the presentation it expects no financing conditions and no regulatory risks.
JPMorgan Chase & Co. analysts said this month that a merger carried risks and could cause some near-term downside in both stocks. Their Dec. 3 note added that the deal would leave investors more exposed to “a declining printer business.”
Activist investor Carl Icahn, who owns as stake in both companies, called on HP last week to push ahead with the talks, calling the deal a “no-brainer.” He accused the company’s directors and management of seeking to preserve their own jobs instead of protecting shareholders’ interests. He argued HP’s standalone plans amount “to little more than rearranging the deck chairs on the Titanic.”
Icahn is Xerox’s largest holder with a nearly 11% stake in the Norfolk, Connecticut-based company. He also owns a 4.2% of HP, making him its fifth-largest holder, according to data compiled by Bloomberg. — Bloomberg
