26 February 1998: As the San Miguel fiasco continues, Andreas Soriano, chairman and chief executive of the Philippine food and beverage group, urged the government to resolve a long-running dispute ov…
26 February 1998: As the San Miguel fiasco continues, Andreas Soriano, chairman and chief executive of the Philippine food and beverage group, urged the government to resolve a long-running dispute over share ownership to avoid lasting damage. The group has been weighed down for 12 years by a conflict between the government and Eduardo Cojuangco, a business associate of Ferdinand Marcos, the late dictator. Both parties claim ownership of about 48% of San Miguel, a stake sequestered by the administration of Corazon Aquino on the grounds that it had been fraudulently amassed. “The realities of cross-border business deals demand a level of innovation and flexibility that is simply not possible with the question of ownership unresolved. It is a natural disincentive for investors, who invariably ask, “who am I getting into partnership with? How stable, or subject to change, will that partner be?“”, Soriano said. The call for a ruling came during his explanation of the company“s poor annual results, announced recently. SMC reported a 48% decline in net income to P 2.73 billion from P 5.26 billion a year ago before a net non-recurring gain of P 223 million. “Last year was one of the most difficult years ever,” Soriano said, while also saying that 1998 would be difficult too, in light of declining beer sales, high interest rates and increased production costs. “It will be a difficult year, but I think we“re trying to get very credible results within the circumstances,” he said. Meanwhile, Mr. Soriano said SMC is cutting back on its expenses for the year as one of the means to ensure its financial strength amid the regional currency turmoil. In addition, Mr. Soriano said they will also take a “proactive foreign currency management strategy,” such as hedging the cost of raw materials by buying dollars at a predetermined forward rate and fully paying off short-term debt.