Metro Pacific unit taking 35% stake in Axelum for P5 billion
By Justine Irish D. Tabile, Reporter
THE agriculture arm of Metro Pacific Investments Corp. (MPIC) is buying a 34.76% stake in coconut products maker Axelum Resources Corp. for P5.32 billion as the investment company boosts its presence in agribusiness.
“The north star of our agriculture business is helping our country achieve food security,” said Manuel V. Pangilinan, MPIC chairman, president and chief executive officer, in a regulatory filing on Tuesday.
“This investment into Axelum will mean more income opportunities for coconut farmers, as well as a broader landscape for Philippine agriculture,” he added.
MPIC subsidiary Metro Pacific Agro Ventures, Inc. (MPAV) will be acquiring 1.19 billion common shares and 200 million redeemable preferred shares in the listed manufacturer of a full line of coconut products.
The move comes after its venture into the dairy business with the acquisition of a 51% stake in Magsaysay-led dairy company, Carmen’s Best Group in June 2022.
The Axelum common shares are being sold by Theol Holdings, Inc., Domus Este Holdings, Inc., Tufnell Park Holdings, Inc., Luxdomino Holdings Corp., Luceatlux Holdings Corp., Greenridge East Holdings, Inc., Axelum Resources Corp. Retirement Plan, CP Compass Singapore Pte. Ltd., and various individual sellers.
The common shares are priced at P4.05 apiece or a total amount of around P4.82 billion, while the redeemable shares are priced at P2.50 each for a total consideration of P500 million.
MPAV is paying a total of P5.32 billion in cash, which the company said is internally funded. Axelum and MPAV said the P500 million will be coming in as “new money” for the manufacturer, which distributes its products in the Philippines and abroad.
In a press briefing on Tuesday, Axelum President and Chief Operating Officer Henry J. Raperoga said: “The proceeds will be used for the improvement of facilities as well as for our expansion program.”
Among the expansion projects is a new coconut water line feeding machine, which will increase Axelum’s capacity to 4 million liters a month from 3 million liters previously.
“We placed an order for the expansion of our coconut water line. We will be putting up another 500-milliliter feeding machine,” Mr. Raperoga said.
Ryan Jerome T. Chua, MPIC vice-president for business development, said the company has not issued any intent in writing to acquire a majority stake in the company.
“We are a minority shareholder primarily because we think that Mr. Chan will continue to be the best operator of this business going forward,” Mr. Chua said, referring to Axelum’s chairman, Romeo I. Chan.
“They know this business far better than us, so our intent here is to develop our businesses together,” he added.
The deal is subject to customary closing conditions as well as regulatory approvals, but MPIC is targeting to complete the transaction before the end of the first quarter this year.
“We have the Philippine Competition Commission’s and various regulatory approvals, so it will be subject to that. Depending on what happens, our best guess is we can finish this before the end of March,” Mr. Chua said.
Axelum is present in more than 30 export markets, with an extensive coconut portfolio under its homegrown brand labels: Fiesta, Fiesta Tropicale, Red V and Romantika. It is also the top supplier of a global coconut water drink brand, Vita Coco.
MPIC is an infrastructure investment company with holdings in Manila Electric Co., Maynilad Water Services, Inc., MetroPac Water Investments Corp., Metro Pacific Tollways Corp., Metro Pacific Hospital Holdings Inc., and Light Rail Manila Corp., among others.
On Tuesday, MPIC shares rose by 12 centavos or 2.98% to close at P4.15 apiece, while Axelum shares dropped by 18 centavos or 5.14% to P3.32 each.
MPIC is one of three key Philippine units of First Pacific, the others being Philex Mining Corp. and PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.