Interview: Frank Llaneza of Villazon
A discussion with the president of Villazon & Co., makers of Hoyo de Monterrey and Punch.
From the Print Edition:
John Travolta, Jan/Feb 99
(continued from page 19)
CA: Let's talk about that. What's happened here since General Cigar bought Villazon?
Llaneza: It was at the RTDA [Retail Tobacco Dealers of America] convention in Cincinnati in 1996. Edgar Cullman Sr. came over there, and he was gracious in his offer. He's lived up to his word. He's let us do this like we wanted to do.
CA: Could you believe it when he made the offer? For that matter, were you ready to sell?
Llaneza: I tell you, it was difficult for me. But once there was the discussion of the numbers and they kept adding up, I said, what the hell. I started looking at my age, and what might happen in the industry. I decided it was time to sell because the numbers got so high.
CA: What was the sale price?
Llaneza: The sale price was $91 million. Danny [Blumenthal] was ready. And we decided to do it.
CA: If Danny had not been involved, would you have sold?
Llaneza: I don't think so. I would have suffered like hell, and he would have said, "Look at that fool down there." But we're happy today. And as long as we're here, we're making the best of it.
CA: What's different about it? You had what amounted to a family company, and now you're part of a corporation. How is that different?
Llaneza: There're a lot of pluses and minuses. I won't go into all of it. We always ran a very conservative and as low-cost a company as we possibly could. We had to do that so we could watch over the growth of the company. We were very fortunate that we had people with me who always let me run it my way. They might have not liked it sometimes, but I went my way. I always thought that a company should have retained earnings sufficient to have enough capital so as not to use the banks. That's a heck of an attitude if you want to grow real big. But that's the attitude I always had. And it worked out fine. I kept Honduras-American Tobacco as a separate company, not showing any dividends until it had all the capital that it needed. Then, we started paying dividends. That was one of the reasons that we were able to stay in business. We didn't go to a bank to borrow any money.
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