MANILA, Philippines — GT Capital Holdings, Incorporated, the listed holding company of business tycoon George Ty, is acquiring 22.68% stake in mass housing developer Property Company of Friends, Incorporated (Pro-Friends) for P7.24 billion ($157.92 million).
GT Capital told the Philippine Stock Exchange (PSE) that the agreement also provides the company an option to increase its direct shareholdings in Pro-Friends to 51% within the next 3 years.
Its acquisition of a significant stake in Pro-Friends came despite the company’s difficulty in securing approval from the PSE to proceed with its P7.7 billion ($167.96 million) initial public offering (IPO).
Pro-Friends is a unit of Profriend Group, Incorporated, which in 2014 filed an application to conduct an IPO.
Pro-Friends, however, recently pulled out its IPO application.
Meanwhile, the acquisition marks the conglomerate’s venture into mass housing development and is expected to complement its real estate develop unit Federal Land, Incorporated.
“We view this acquisition as a mutually beneficial partnership for both parties. Profriends has the product expertise and the strategic land bank, while GT Capital has the financial resources and access to capital,” GT Capital Chairman Francisco Sebastian said.
“Our partnership adds a new dimension to GT Capital’s property development portfolio and will enable our group to be one of the market leaders in the low-cost housing sector,” he added.
For his part, Profriends Chairman Guillermo Choa welcomed the company’s partnership with GT Capital.
“The low-cost housing segment is the real sweet spot in the country’s property sector, with a supply shortage of over three million homes, which continues to grow annually,” Choa said.
“Our partnership with GT Capital will strengthen our ability to be a leading player in serving this urgent market need. Moreover, the potential synergies of working with other component companies in the GT Capital group will enable us to offer our live, work, learn, play, and worship estates to many more middle income Filipino families,” he added.
Federal Land President Alfred Ty said the acquisition will expand the group’s presence in the property market.
“The GT Capital group will now offer Federal Land’s upper- mid to high-end vertical projects and Profriends’ low-cost horizontal and mixed-use townships in key areas near Metro Manila. Our strategic tie-up will thus be a fusion of all property sub-segments,” Ty said.
Last December, Pro-Friends reported an audited net income after tax of P3.61 billion ($78.74 million). – Rappler.com
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