D&L completes buyout of Chemrez

MANILA, Philippines - D&L Industries Inc. has completed the buy out of the minority shares of affiliate Chemrez Technologies.

Following the completion of the tender offer, D&L Industries will now own 99.7 percent stake in Chemrez Technologies.

D&L said in a statement that a total of 846.41 million shares have been tendered, representing approximately 65 percent of the issued and outstanding shares of Chemrez Technologies.

The tendering shareholders are set to be paid P6 in cash for every share they own for an aggregate cost of about P5.10 billion.

D&L Industries said bulk of the approximately P5.10 billion cost of the acquisition will be financed with short-term borrowings.

“Pre-acquisition, we were net cash. Further, short-term borrowing costs are currently very low—much lower than the overnight or SDA rates—and there are no indications of interest rates going up anytime soon. Hence, there does not seem to be any urgency to refinance and it is possible to just live with debt as short-term,” D&L Industries executive vice president and chief finance office Alvin D. Lao.

In line with the minimum public ownership rule of the Philippine Stock Exchange (PSE), D&L Industries said it would most likely cause the voluntary delisting of Chemrez Technologies with the latter’s public ownership falling below the minimum 10 percent.

The tender offer period commenced on Sept. 4 and ended on Oct. 3. The tendered shares were crossed in the PSE on Oct. 7.

D&L serves as manufacturer of customized food ingredients and specialty products while Chemrez is a leading manufacturer of resins, oleochemicals, and specialty products in the Philippines.