MRC Allied, Tan Jr. in ‘buy’ mode

Business Mirror Written by Miguel R. Camus / Reporter

TUESDAY, 21 SEPTEMBER 2010 13:24

LISTED MRC Allied Inc., in partnership with businessman Lucio Tan Jr., wants to be more aggressive in acquiring companies that can deliver “immediate” earnings as part of its plan to book profits starting next year. In an interview following the company’s stockholders’ meeting on Tuesday, MRC Allied majority shareholder Benjamin Bitanga said the diversifying real-estate firm can spend upward of P2 billion for acquisitions. He said MRC Allied is finalizing, through a private firm, its acquisition of the majority stake in remittance and cargo delivery company Johnny Air Cargo by October this year. Bitanga said the deal, worth between P500 million and P800 million, will help bring the company’s 2011 net income to P150 million on revenues of P4 billion. The diversifying company booked a net loss of P18.05 million in the six months to June this year.   Asked on an earlier plan to venture into power generation with Tan Jr., Bitanga said MRC Allied remains open to investing if the target acquisitions are operational power plants.   The younger Tan intended to convert MRC Allied into a power-generation firm by infusing up to P3.5 billion worth of power plant assets into the company. “As much as we wanted to only concentrate on the power business, it takes long before it will generate income for the company,” Bitanga said yesterday. “What we need to do now is to acquire operating companies that can be reflected in the books of MRC Allied as operating profit right away,” he added. Meanwhile, minority shareholders of MRC Allied on Tuesday waived a requirement by the bourse to conduct a public or rights offer in relation to issuance of new common shares to Menlo Capital Corp., a company majority-controlled by Tan Jr. This will allow the listing of Menlo shares at the Philippine Stock Exchange, and formalize the entry of Tan Jr. as chairman of MRC Allied. Bitanga said the company plans to hold a rights offering to raise about P500 million. The offer terms have yet to be decided. Bitanga declined to name other acquisitions, only saying there are “several” in the pipeline. MRC Allied plans to expand Johnny Air, a company with offices in the US and the Philippines, once the acquisition pushes through, a source close to the deal said in an earlier interview with the BusinessMirror. Under MRC Allied, Johnny Air will open 20 new locations in 12 months to expand its network in North America as well open new branches in Italy and the United Kingdom to tap overseas Filipino workers in those locations. The company is expected to support the businesses of Tan Jr.’s father, tycoon Lucio Tan, who owns Philippine Airlines and Philippine National Bank. The younger Tan also plans to take the company public.