Alphaland to raise P3.4B for 2014 real estate projects

MANILA, Philippines – Alphaland Corporation is raising about P3.43 billion ($78.62 million*) through the issuance of shares to fund real estate projects this year, even if it already volunteered to be delisted over disclosure violations.

Alphaland said it would seek shareholders’ approval to issue up to 1.374 billion common shares at P2.50 ($0.057*) apiece, “as financing alternatives in order to augment funding of its affiliates’ projects for the year 2014,” the real estate firm said Tuesday, July 15, in a disclosure to the Philippine Stock Exchange (PSE).  

Under the plan, Alphaland will issue 600 million shares to Roberto Ongpin-led RVO Capital Ventures Corporation; up to 108.336 million shares to Alphaland minority shareholders; about 557.567 million common shares to pay for the acquisition of land located in Itogon, Benguet for the Alphaland Baguio Mountain Log Homes Project; and around 109 million common shares to new investors.

Meanwhile, Alphaland said it expects the PSE to eventually approve its application for voluntarily delisting from the exchange.

In March 2014, PSE initiated delisting procedures against Alphaland for repeated violations of disclosure rules.

The violations occurred in the course of its disclosure of the alleged simulated sale of Alphaland shares between London-based Ashmore Group and Credit Suisse (Singapore) Ltd.; cases involving the company; its state of financial distress; and its representation of its conduct of a stock rights offering, which it later admitted as a “minority offering.”

Alphaland said the Ongpin group and the Ashmore group were supportive of the voluntary delisting.

“However, with the signing of that definitive agreement, (the settlement between Ongpin and Ashmore) management expects that the PSE will eventually grant Alphaland’s application for voluntary delisting,” Alphaland said.

Dispute settlement

In June, Ongpin’s group settled its dispute with Ashmore by agreeing to transfer some of its properties to a new company controlled by the British fund manager. The dispute was among the most public controversies for the former finance minister and ally of late dictator Ferdinand Marcos. (READ: Ongpin vs Ashmore: The real deal)

Under the settlement, Alphaland would transfer some of its prime assets to a newly formed company owned by Alphaland Holdings (Singapore) Pte. Ltd (AH) and Masrickstar Corp (MC).

The assets to be transferred to AH and MC are:

• 100% of Alpahaland Makati Tower Inc., which owns Alphaland Tower along Ayala Avenue, Makati City
• 100% each of Alphaland Marina Club Inc. and Alphaland Marina Corp., which is currently developing Alpahaland Marina & Country Club project in the Manila Bay reclamation area in Parañaque City
• 50% ownership of the Alphaland group in Alphaland Bay City Corp., the joint venture formed by Alphaland group and Wenceslao group to develop the 32-hectare Alphaland Bay City at the Aseana Business Park in Parañaque City
• 60% interest owned by the company in the Boracay Gateway project, the incorporated joint venture between the company and the Akean Resorts Corp. to develop the latter’s 500 hectares of land in Caticlan (Makay) and Nabas, Aklan

In return, AH and MC will transfer back all of the shareholdings in Alphaland and will also pay the company P2.5 billion in cash in two tranches.

Alphaland though will remain majority-owned and controlled by the Ongpin group. The Alphaland Southgate Tower and Mall; Alphaland Makati Place, including the City Club; Alphaland Balesin Islands Club; and Alphaland Baguio Mountain Lodge Homes are among the assets that will remain with the company.

The Wenceslao Group, Ongpin’s partner in Alphaland Bay City, questioned the transfer of the latter’s shares in the joint venture.

The Wenceslao Group claims it has first right to the shares and it also has a “tag-along” right, which allows it to sell its holdings in the joint venture on the same terms Alphaland is transferring its shares to Ashmore. – Rappler.com

*($1 = P43.62)