Alvarez willing to raise bid for Philphos to P3 billion

Businessman Jose Ch. Alvarez is reportedly willing to raise his bid to as much as P3 billion for government’s shares in the Philippine Phosphate Fertilizer Corp. (Philphos).

After failing to win the public bid conducted by the Asset Privatization Trust (APT), sources said Alvarez is now in the thick of negotiations with the government for the sale of the shares.

According to the source, the Committee on Privatization had given APT the green light to go into a negotiated sale for the Philphos shares after the failed bid in October.

During the auction, none of the bidders met the P4.2 billion indicative price set by the COP and even the P3.4 billion discounted price that the APT said government was willing to accept.

The consortium headed by Alvarez offered the highest bid of P2.5 billion but the APT did not declare a winner, saying that even the highest bid was lower by more than 20 percent compared of the government’s indicative price of P4.2 billion.

Alvarez represented Delphi Holdings Corp. but the businessman refused to name the other members of the consortium except for a certain Michimin Corp. which he describe as the sixth largest trading firm in Japan.

The other bidder was Lapanday Holdings Corp. which offered to buy government’s 45 percent stake in Philphos for P2 billion.

According to the source, Alvarez had expressed his willingness to raise his group’s bid to P3 billion but the APT would have to seek the approval of the COP before accepting the bid.

Alvarez is currently the chairman of Philphos, representing the interests of the government of Nauru which owns 50 percent of the company. His consortium was identified with Nauru, which meant that the government of Nauru could end up owning all of Philphos.

Alvarez had earlier blamed APT for not accepting the Republic of Nauru’s offer last year to buy out of the Philippine government’s stake at P3 billion which he said would have settle the matter there and then.

The APT said it had to refuse the offer because it did know the value of government’s shares in Philphos until recently, when it hired PricewaterhouseCoopers to conduct a valuation study.

Philphos was established in 1982 and is touted to be Asia’s largest and most modern phosphatic fertilizer plant built on a 180-hectare complex in Isabel, Leyte. Plant capacity is over a million metric tons of high-quality fertilizers. – Des Ferriols