MANILA, Philippines (UPDATE) - A private equity fund controlled by the Chinese government will become the country's largest ferry operator as a result of deals announced by 2 major domestic shipping firms on Wednesday.
The Aboitiz group is selling its entire 93.2% in shipping and logistics unit Aboitiz Transport Systems Corp. (ATS) to rival Negros Navigation Co. Inc. (Nenaco) for $105 million.
The deal will make the soon-to-be Chinese-owned Nenaco the biggest ferry operator in the Philippines, with 31 vessels.
Aboitiz officials said that China-ASEAN Marine BV will take a controlling stake in Negros Navigation through an equity infusion simultaneously with the ATS-Nenaco deal.
China-ASEAN Marine is a wholly owned unit of the China-ASEAN Investment Cooperation Fund, a Dutch-based private equity fund launched by the China Export-Import Bank, the joint statement said.
The fund, announced by Chinese Prime Minister Wen Jiabao last year, targets infrastructure, energy and natural resource investment opportunities in the 10-member Association of Southeast Asian Nations (ASEAN).
The twin deals are expected to be completed in January next year, the statement said.
The size of China-ASEAN Marine's equity infusion into Negros Navigation, a privately held Philippine firm, was not disclosed.
However Erramon Aboitiz, chief executive of ATS's listed parent firm, Aboitiz Equity Ventures, said China-ASEAN Investment Cooperation Fund would become Negros Navigation's largest shareholder.
"We are very pleased to transfer the ownership of ATS to Nenaco and its principal shareholders, the Chinese-ASEAN Investment Cooperation Fund," Aboitiz said in a separate statement.
Nenaco chief executive Sulficio Tagud said his company now operated 8 vessels in 13 ports, while ATS operated 18 vessels in 19 ports.
"With a strong balance sheet, the joint team is confident that the increased resources of the combined company will enable us to provide innovative services, enhanced frequency and improved customer care," Tagud said.
Deal only includes...
The sale of ATS' to Nenaco includes all of its shipping and logistics businesses, namely, Superferry, Supercat, Cebu Ferries and 2GO, Aboitiz Equity Ventures Inc. (AEV), the listed holding firm of the Aboitiz Group said.
Only the joint venture firms with the Jebsen Group of Norway will be spared, AEV added.
ATS will sell the joint ventures -- Aboitiz Jebsen Bulk Transport Corp., Aboitiz Jebsen Manpower Solutions Inc. and Jebsen Maritime Inc. -- to AEV for a total of P355.91 million.
ATS will also sell its 50% interest in chartering company Jebsen Maritime Limited to ACO for P44 million.
Meanwhile, AEV said that in accordance with the Securities Regulation Code, Nenaco will make a tender offer for all ATS shares owned by the public at the same purchase price to be paid the Aboitiz group.
"The purchase of the public shares shall coincide with the closing date of the securities purchase agreement unless the Securities and Exchange Commission approves that the closing of the tender offer shall occur at a later date," AEV said.