US tire firm sells 13% stake in Philtread

US tire manufacturing firm Bridgestone-Firestone North American Tire LLC has divested its entire 13-percent stake in publicly-listed Philtread Holdings Corp. for about P26 million.

In a disclosure statement filed with the Securities Exchange Commission, Philtread president Renato Leveriza Jr. said Bridgestone sold a total of 13,137,287 shares of Philread for P2 apiece.

Of the total shares, 7,484,312 were sold to controlling shareholder ATR Holdings Inc. and the balance of 5,652,975 shares was purchased by another existing Philtread shareholder, Kim Eng Ong Asia Holdings.

Kim Eng is a Singapore-listed investment holding company that owns a network of stockbrokerages in the Asian region as well as sales offices in New York and London.

ATR Holdings, on the other hand, is composed of local investment bankers Ramon Arnaiz, Manuel Tordesillas and Lorenzo Roxas together with US-based private equity fund Gilbert Global Equity Partners Inc.

With the acquisition of additional shares, the ATR-Kim Eng Group’s shareholdings in Philtread will increase to 53 percent, giving them controlling interest in the local listed firm.

Aside from ATR and Kim-Eng, other shareholders of Philtread are Philex Mining Corp. (24.74 percent), and Motherwell Inc. (5.95 percent).

Philtread earlier unveiled plans to raise P1.2 billion through a stock rights and warrants offering to finance new investments as part of its ongoing reorganization and transformation into a diversified financial services company.

It will offer 500 million new shares at the offer price of P2 per share together with 100 million detachable warrants that are convertible into common shares.

Shareholders can subscribe to five rights shares for every one common share held as of a record date yet to be set by the company. Those who subscribe to the rights shares will be issued warrants for free at the ratio of one warrant for every five rights shares purchased at the exercise price of P2 per share. Each warrant shall also entitle the holder to subscribe to one common share.

The warrants, which will be listed at the Philippine Stock Exchange, may be exercised over a two-year period. As of July 31, 2002, shares of Philtread closed at P4.50 per share.

The board of Philtread will change the company’s name to ATR King Eng Financial Corp. to reflect its new primary business.

The company will continue its diversification into related financial services-related businesses that can provide recurring and stable earnings to the company.

The ATR-Kim Eng Group earlier formed ATRKE Capital which is primarily engaged in investment banking, focusing on corporate finance and fixed income, securities brokerage and trust services. It ranks as among the top 10 investment houses in the country as of year-end 2001.

Incorporated in 1993, ATRKE was originally known as Peregrine Capital Philippines Inc., the Philippine affiliate of Peregrine Investment Holdings Ltd. of Hongkong until the ATR Holdings Group acquired 100 percent ownership in 1998. A year later, ATR sold its 43.03 percent ownership in ATRKE Capital to Kim Eng.

Philtread was incorporated in October 1930 as Firestone Tire & Rubber Co. of the Philippines to engage in the manufacture of automotive tires under the "Firestone" brand.

In 1993, the company began to incur heavy business losses due to slowdowns in production brought about by severe labor problems and the unabated dumping of foreign tires in the country, which adversely affected the local tire industry. Crippled by its huge debt, Philtread halted manufacturing operations as its tire plant and closed the facility to prevent further losses.

With the sale of its properties and assets, Philtread became an investment holding company whose main assets were a 60-percent equity in Sucat Land Corp. and a small minority shareholding in MSF Tire. – Zinnia dela Peña