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By JAMES A. LOYOLA
The Lopez group has obtained the approval of minority shareholders of City Resources Corporation for the acquisition of First Philippine Infrastructure Development Corporation at the unaudited book value of P9.97 billion.
City Resources will acquire FPIDC from First Philippine Holdings Corporation and Benpres Holdings Corporation which owns about 51 percent and 49 percent of FPIDC, respectively, and will be renamed First Philippine Infrastructure Inc.
FPIDC is the Lopez group’s main vehicle for the pursuit of toll road infrastructure projects in the Philippines and currently holds a 67.1 percent stake in North Luzon Expressway concessionaire Manila North Tollways Corporation and 46 percent of NLEX operator Tollways Management Corporation.
Benpres and CRC chief finance officer Salvador Tirona said the approval paves the way for a planned capital hike for the share swap and a planned tender offer by Benpres for the shares held by the minority and the backdoor listing of FPIDC.
Benpres and FPHC Chairman Oscar Lopez said there are currently no plan to sell shares of City Resources to the public via a follow through offering after the backdoor listing since the firm still does not have any capital requirement.
It is proposed that one share of FPIDC with a par value of P100.00 be exchanged for 168.51 shares of City Resources with a par value of P1.00 based on FPIDC’s unaudited book value of P4.97 billion divided by its total issued shares of 29.497 million as of Dec 31, 2006.
Tirona said shareholders are getting the better end of the deal as the audited book value of FPIDC is actually P5.8 billion compared to the unaudited P4.97 billion.
"Had the audited book value been used, the new shares to be issued by City Resources would have been higher and the resulting ownership of the minority lower at 0.14 percent," said Tirona, instead of the 0.16 percent they will retain.
With the shareholders’ approval, City Resources will now raise its authorized capital from P355 million to P5.4 billion and issue 2.44 billion shares to Benpres in exchange for 14.45 million FPIDC shares and 2.53 billion CRC shares to FPHC in exchange for 15.04 million FPIDC shares.
The share swap will allow the Lopez group to control 99.84 percent of City Resources from the current 91.6 percent. The group hopes to control 100 percent of the company after the tender offer to be undertaken by Benpres.
The trading of City Resources shares was suspended by the Philippine Stock Exchange in May 8, 1994 before Lopez Inc. acquired 91.6 percent of the company from Starfield Holdings.
The Securities and Exchange Commission suspended then revoked CRC’s the registration of securities and permit to sell securities to the public in 2004 for failure to comply with its reportorial requirements.
The SEC set aside the order of revocation last January after the firm submitted a business plan for CRC detailing the transfer by Benpres of its shares in FPIDC to City Resources. FPHC also decided to do transfer its FPIDC shares last April.
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