Aboitiz to sell 100-year shipping business to Nenaco

The Aboitiz family will sell its century-old shipping business to Kuwaiti-backed rival Negros Navigation Co. Inc (Nenaco) for $81 million. In a disclosure to the Philippine Stock Exchange, holding firm Aboitiz Equity Ventures (AEV) said its board had unanimously agreed to sell Aboitiz Transport Systems (ATS) Corp. to its competitor. Aboitiz Equity and sister firm Aboitiz & Co. (ACO), owns around 92 percent of ATS. “AEV expects to receive approximately $81 million" from the sale, said the company. “The agreement also requires Nenaco to make a tender offer for all ATS shares owned by the public at the same purchase price to be paid to AEV and ACO," the disclosure read. “The divestment of [ATS] was a very difficult decision to make, considering the Aboitiz group has been in the transport business for over 100 years," said Erramon Aboitiz, AEV’s president and CEO. Proceeds from the sale of ATS will help the Cebu-based family expand its banking and energy-related businesses. In 2009, Nenaco’s parent KGLI-NM Holdings Inc., a company owned by Kuwaiti Gulf Link Investments, offered to buy the Aboitiz family’s transport business — a deal that fell through after the Kuwaiti group’s finances were strained by the global financial crisis. This time, Nenaco will finance the purchase of ATS with equity investments from China-ASEAN Marine B.V., a Netherlands-incorporated company wholly owned by China-ASEAN Investment Cooperation Fund. China-Asean Investment is a private equity fund sponsored by the China Export-Import Bank. Under the terms of the deal with Nenaco, the Kuwaiti-backed firm will buy the Aboitiz family’s interests in the transport sector, except the business interests the family co-owns with the Jebsen Group of Norway. These business interests include ship management, manning and crew management, and bulk transport held by the Aboitiz Jebsen group. To limit the deal with Nenaco, AEV will buy the 62.5 percent equity of ATS in Aboitiz Jebsen for P355.91 million. ACO will also acquire ATS’s 50 percent equity in Aboitiz Jebsen’s chartering business for P44 million. “The buyout is expected to close on or before January 10, 2011," AEV said in the disclosure. — VS/OMG/MRT, GMANews.TV