Home 
CEBU CITY, Philippines - Aboitiz Equity Ventures (AEV) has decided to sell the transport arm of the company in a bid to reinvest sales proceeds to core businesses such as power and increase profit in the long term.
?There are lots of opportunities around the industries especially the power side that it might be a good deal to sell (ATS) and reinvest in other industries which will give better returns in the long term basis,? said AEV executive vice president and chief operating officer Erramon Aboitiz.
AEV has accepted the offer of KGLI-NM Holdings Inc. to buy all shareholdings of Aboitiz Transport System (ATS), which has a total value of P5 billion.
AEV is the publicly-listed Aboitiz holding company that handles Aboitiz Power, UnionBank, City Savings Bank, Aboitiz Transport System, Pilmico Foods Corp. and Fil-Am Foods.
KGLI-NM, AEV and its sister company, Aboitiz & Company, Inc. (ACO), signed a memorandum of agreement (MOA) yesterday signifying the acceptance of the sales offer.
AEV owns 77 percent, while ACO owns 16 percent of ATS. The rest of the stocks are owned by minority shareholders.
Aboitiz said they do not have intentions of selling ATS unless they get the ?right price? for the company.
?We were approached by the buyers if we were interested in selling (ATS)....they came back with a reasonable offer,? Aboitiz said in a conference call with business reporters on Tuesday.
The planned acquisition will include all of ATS' shipping and logistics businesses, which include Superferry, Supercat, Cebu Ferries and 2GO.
Only the joint venture in ship management, manning and crew management, and bulk transport with Jebsen Group of Norway will be spared from the buyout.
Aboitiz, however, noted the offer is still subject to a due diligence audit to be conducted by KGLI-NM sixty days after the MOA has been signed.
Should KGLI-NM decide to officially buy ATS, the company will inform AEV and ACO on November 22.
If KGLI-NM will not push through with the transaction, Aboitiz said they will still continue the ATS' logistics and distribution business.
Aboitiz said they have not specifically identified where to put the sales proceeds but noted that power may be ?more involved? in the process.
?The income contribution of Aboitiz Power is getting dominant of the Aboitiz Group of business especially with the privatization of Napocor (National Power Corp.),? he said.
KGLI-NM is jointly owned by Negros Holdings and Management Corp (NHMC) and KGL Investment BV (KGLIBV), a Dutch company.
NHMC owns 60 percent while KGLIBV owns 40 percent of KGLI-NM.
Aboitiz assured that no employees will be displaced should the buyout push through. He said it will be ?business as usual.?
?Nothing will change. We will be briefing our employees this afternoon (Tuesday) after we sign the deal. Eventually, the new management will put their own CEO but we are committed to help the new owners with the transition,? he said.
It was a tough decision to sell the transport unit noting its ?sentimental value,? Aboitiz said.
The Aboitiz patriarch, Don Ramon, ventured into shipping in 1907 to transport goods across different islands. The company's first boat was called MV Picket.
?It was not an easy decision. We have been in transport business for 100 years. It was a hard decision but we are businessmen. We have to make choices of where to place our money...money is not an unlimited resource. We give priority and allocate. So tough decisions are made.?
