The amount will be sourced from proceeds of a share sale that will hike the listed firm’s public float in compliance with the local bourse’s rules, Nestor C. Medones, the company’s chief finance officer said.

“The company currently has ongoing expansion programs with estimated costs of P1.8 billion for the next two years,� Mr. Mendones said in a telephone interview.

He said the company will be spending around P700 million for the expansion of its bottling lines in Negros Occidental and Cabuyao, Laguna.

The upgrade of the two bottling lines will enable the firm to produce 40,000 cases per day, he said.

Mr. Mendones also said the company will invest P500 million for the expansion of its distillation facility in Batangas.

He said the upgraded distillation plant could store about 100,000 liters of alcohol from 75,000 a day.

“This expansion does not actually make us produce more, but it would give us better quality of products and sustainability,� he said.

Mr. Mendones said the improved facility will allow the company to refine alcohol according to their intended type.

“Before, we would import alcohols and distill here according to the type of the liquor. But with the new expanded distillation facility, we could do it on our own,� he said.

“This would also sustain our supply of alcohol,� he said, adding the expansion work slated to start this year will be finished by thie first half of 2012.

He added that the company is also looking to expand its storage facility in Batangas.

Last week, Tanduay Holdings said in a disclosure that the company is selling a total of 398,138,889 shares from Tangent Holdings Corp., which controls 97% of the liquor producer.

Tanduay’s board of directors approved the capital-raising exercise on Wednesday.

The shares up for sale amount to at least 10% of Tanduay, the Philippine Stock Exchange said.

Tangent Holdings, in exchange, will “subscribe to 398,105,556 new common shares from the company’s unissued capital stock at the adjusted offer price.�

According to the disclosure, this will be “subject to the approval of the stockholders at the company’s annual shareholders meeting in May 2012.�

So far, the firm has posted a 60% growth in net income from January to September to P885 million over year-ago levels due to higher selling prices.

This figure exceeded the full-year net income of the firm in 2010 amounting to P625 million, keeping the company on track to meeting its full-year target of P1 billion.

The firm, formerly known as Asian Pacific Equity Corp., was incorporated in 1937 under the name The Manila Wine Merchants, Inc.
Tanduay’s share prices rose by 2.27% to P4.50 apiece on Friday. — Cliff Harvey C. Venzon