END OF AN ERA: Gov't bows out of San Miguel with buyback of 24-percent stake
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MANILA - (UPDATED 6:01 p.m.) San Miguel Corp. on Friday said it paid the government, through the Coconut Industry Investment Fund, P57.5 billion in exchange for the sequestered shares of the conglomerate.
In a statement, Eduardo M. Cojuangco Jr., SMC chairman and chief executive officer, said he formally turned over the checks to CIIF president Jesus Arranza, who received the payment on behalf of the fund's 14 holding companies.
The amount represents the government's 24 percent stake in SMC. The Supreme Court recently declared that the subject shares belong to the government, which is holding the stocks in trust for coconut farmers. Those shares were acquired using the levy collected from farmers in the 1970s.
“We have achieved our objective of giving to the coconut farmers and the industry the means for them to regain their competitiveness through the use of these funds," said Cojuangco.
The Presidential Commission on Good Government said it remitted the money to the Bureau of Treasury.
PCGG Chairman Andres Bautista said this is the largest single recovery to date. Along with the escrowed dividend payments and accrued interest reaching P13.44 billion, these monies will be used “only for the benefit of all the coconut farmers and for the development of the coconut industry," he said.
Arranza said the amount will finance research and development projects and livelihood programs.
“These funds come at the most opportune time for the farmers as we have to prepare the coconut industry against competition coming from palm oil,” Arranza said.
“With palm oil growing in popularity and demand, we need to create a niche for coconuts products in the higher value added segment. That way, we will be able to sustain the coconut industry for the long term, and provide better, more stable income to the farmers,” he added.
SMC used the proceeds from its recently concluded P80-billion preferred share offering to buy back the preferred shares issued in 2009.
On January 24, 2012, the Supreme Court, in an 11-0 decision, adjudged the CIIF block of shares as having been purchased by means of the coconut levy funds and therefore represented public funds. The High Tribunal on September 4 unanimously denied the motion for reconsideration filed by a group of coconut growers.
“The plight of our coconut farmers has long haunted our country. We trust that this recovery will be used to ease their burdens in a concrete and significant manner” Bautista said.