Philippines-listed Phinma invests in largest local cement manufacturer

September 21, 2019 | 16:48

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Philippines-listed company Phinma Corporation is investing $50 million in Song Lam Cement JSC through a subscription of preferred shares convertible into common shares, according to a disclosure from Philippine Stock Exchange.

philippines listed phinma invests in largest local cement manufacturer

Phinma iwill invest approximately $50 milion in the Vietnamese cement manufacturer

Phinma signed a binding term sheet with Song Lam, Vissai Ninh Binh JSC, and Hoang Minh Truong for the proposed investment in Song Lam, a subsidiary of Vissai via preferred shares.

The preferred shares will be entitled to receive annual, fixed cumulative dividends of 7.5 per cent. The preferred shares shall be convertible to common shares.

The number of shares and the percentage stake Phinma will have in Song Lam following the investment have not been disclosed yet but the Philippines-listed company said Song Lam will become a major supplier of Philcement Corporation – a 60 per cent owned subsidiary of Phinma.

Phinma will also be entitled to nominate one member of the board of directors as well as the chief financial officer of Song Lam.

Philcement is building a cement terminal with a storage capacity of two million tonnes for its cement importation business in Mariveles, Bataan at a cost of about P700 million ($13.4 million). Mariveles is a deep-sea port and can thus accommodate very large Panamax vessels from Vietnam which improves the efficiency and the cost per bag of cement.

According to analysis by financial data and business information provider FiinGroup, the production capacity of Vietnam's cement industry is expected to increase sharply thanks to the strong expansion of local private enterprises, including Thanh Thang Group Cement JSC, Vissai Group, ThaiGroup Corporation (formerly known as Xuan Thanh Group), and Long Son Co., Ltd. Vissai is the largest privately-owned cement manufacturer in Vietnam and exports to 37 countries, including the Philippines.

This year, the industry has targeted exporting about 25 million tonnes of cement and selling between 69 and 70 million tonnes domestically.

By Ha Vy

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