THE education arm of Phinma Corp. is investing P278 million in a joint venture (JV) firm in Indonesia, marking its entry into the Southeast Asian country.
In a disclosure to the stock exchange on Tuesday, Phinma said its wholly-owned unit Phinma Education Holdings, Inc. signed on Feb. 11 a joint venture agreement with Indonesia’s Tripersada Global Manajemen for the establishment of PT Ind Phil Managemen (IPM).
Under the agreement, Phinma Education will subscribe to 66% of the shares of IPM, amounting to 74.45 billion Indonesian Rupiah (IDR), or about P278 million. Phinma Education will pay IDR 35 billion within the month to fulfill IPM’s initial capitalization requirements.
IPM will oversee tertiary institutions for Yayasan Triputra Persada Horizon Education, the first of which will be located in West Java, Indonesia.
The listed firm said its entry into the Southeast Asian market will further strengthen its position in the education industry.
“This investment represents Phinma Education’s entry into Indonesia as part of its regional strategy. Indonesia, with a population of over 260 million, provides the company with a new market to serve, and a new source of income,” the company said.
BusinessWorld earlier reported Phinma is on the lookout for possible acquisitions in Vietnam, as well as another one in Metro Manila.
“Our education business continues to do very well and we’re looking at more acquisitions, both in the Philippines and in Southeast Asian countries,” Phinma Corp. President and CEO Ramon R. del Rosario told BusinessWorld last Feb. 1.
The company currently owns six universities and colleges in the country, namely Araullo University, Inc., Cagayan de Oro College, Inc., University of Iloilo, Inc., University of Pangasinan and subsidiary Southwestern University, and St. Jude College Manila, Inc.
The expansion of its education business will be financed by a mix of cash flow from operating schools and the proceeds from the recent sale of its 51.48% stake in Phinma Energy Corp. to Ayala-led AC Energy, Inc.
The Phinma group had sold its stake in Phinma Energy Corp. via a secondary share sale worth around P3.42 billion. The company said the sale was a timely opportunity, given they have established the business 50 years ago and have grown it to the extent that it can.
Proceeds of the sale will also be used to finance the company’s construction businesses. The firm has a majority stake in iron and steel products manufacturer and distributor Union Galvasteel Corp. as well as PhilCement Corp.
Phinma’s attributable profit surged by 270% to P135.98 million in the first nine months of 2018, versus P36.7 million in the same period a year ago, after gross revenues climbed 48% to P7.01 billion.
Shares in Phinma closed unchanged at P9.36 each at the stock exchange on Tuesday. — Arra B. Francia