RFM to list property unit by way of introduction

ABS-CBN News

Posted at Jun 25 2008 05:29 PM | Updated as of Jun 26 2008 01:29 AM

By JUDITH BALEA
abs-cbnNEWS.com

Food and drinks firm RFM Corp. of the Concepcion family said Wednesday it would list, by way of introduction, the shares of its wholly owned subsidiary Philippine Townships Inc. (Philtown) late this year.

Philtown is the company's property development arm whose projects include the 43-storey One McKinley Place and 28-storey Fairways Tower in Fort Bonifacio Global City. It also has projects in the cities of Makati and Pasig.

At the sidelines of RFM's annual stockholders meeting, its executive vice president and chief operating officer, Felicisimo Nacino Jr., told reporters that the listing would be done via the declaration of a P501.87-million property dividend, payable in the form of 143.65 million Philtown common shares.

Stockholders are entitled to receive one share of Philtown for every 22 RFM shares held as of July 9, 2008.

The payout would bring down RFM's ownership in Philtown from 100 percent to just 34.21 percent, with the majority stake of 65.79 percent directly held by the public.

Companies that are not in a hurry to raise additional capital and have widely dispersed ownership of shares usually undergo an introductory listing or that without an initial public offering (IPO). Among companies which pursued this strategy were call center operator eTelecare Global Solutions Inc., property developer Vista Land & Lifescapes Inc. of the Villar group and PetroEnergy Resources Corp.

"But we plan to hold an IPO one or two years down the road," said Nacino.

Nacino added that RFM was also looking to sell what would be left of its stake in Philtown after the dividend payout.

Aside from the property dividend, RFM also declared a cash dividend of P0.015 per share or a total of P50.0 million to all shareholders of record as of July 9 after posting strong profits in 2007. The company reported a net income of P234 million last year, up 15.6 percent year-on-year.

President and chief executive officer Jose Concepcion III expressed confidence in the company's continued growth, backed by its new investments in plant facilities and equipment amounting to P800 million.

RFM is expanding its manufacturing facilities including its PET bottle-blowing and filling lines for its recently launched Sunkist Iced Tea, Hi-Juice products and Vitwater. It is also constructing a new pasta-making plant to service the growing demand for its Fiesta pasta, which enjoys a market share of 26.0 percent.

"We have also started to reinvest in upgrading our Cabuyao meat processing and cold storage facilities as we aim to cut down further our production and logistics cost," Concepcion said.

In the next five years, RFM targets to double its revenues to P14.0 billion and reach a record net income of P700.0 million.