MANILA, Philippines – Andrew Tan-led Megaworld Corporation has increased its stake in tourism estate developer Global-Estate Resorts Inc. (GERI) to 80.4% from 25.76%, signaling the company’s foray into the tourism industry.
Alliance Global Group Inc, the parent company of Megaworld, shared on Friday, June 20 that it has completed the sale of its 5.405 billion common shares or 49.2% in GERI, to Megaworld Corporation for P10.43 billion ($238.29 million).
Megaworld also acquired additional 5.44% interest in GERI through the minority shareholders that sold their shares in GERI during the tender offer period conducted by the property firm.
“Megaworld’s acquisition of GERI signals our official entry to the country’s tourism industry,” Tan, who is the Chairman and Chief Executive Officer of Megaworld, said in a statement.
GERI will remain listed with the Philippine Stock Exchange (PSE). It will explore plans to tap the debt market to partially finance its expansion projects, Megaworld Executive Director Kingson Sian said in an interview at the sidelines of Megaworld’s annual stockholders meeting.
Megaworld said it will take an active role in master planning and conceptualizing GERI’s township projects.
Among GERI’s biggest projects is the 1,149-hectare Twin Lakes in Tagaytay City. The European-themed estate is master planned to contain retirement villages, schools, residential condominiums, hotels, and spa, including commercial, retail hubs, and sports and recreational facilities.
Another project of GERI is the 150-hectare Boracay Newcoast, which occupies 14% of the entire of Boracay Island. The project will soon be home to international hotels.
GERI is also developing the 561-hectare Southwoods City and the 170-hectare Sta. Barbara Heights in Iloilo.
Meanwhile, the Sobrepeña group remains a minority shareholder of GERI with 6% to 7% stake in the company.
Robert John L. Sobrepeña is GERI’s co-chairman of the board of directors, and is now facing estafa charges. He has been issued an arrest warrant for owing the state-owned Bases Conversion and Development Authority (BCDA) damages worth P1.15 billion ($34.27 million).
Consolidated real estate business
On June 16, Megaworld Corporation reported it would be spending P230 billion ($452.55 million) this year until 2018 for residential, office, and retail projects in various parts of the country.
Tan has consolidated his real estate business under Megaworld. Apart from GERI, Megaworld also owns Empire East Land Holdings Inc. and Suntrust Properties Inc.
Meanwhile, parent company Alliance Global acquired Megaworld’s 1.125 billion common shares in Travellers Internaitonal Hotel Group for P10.43 billion ($23.83 million).
Sian said Alliance Global acquired the 1.125 billion shares for P9.27 per share, which was Traveller’s closing price on June 19.
Prior to the transaction, Megaworld owned an estimated 9% stake in Travellers. With the sale, Megaworld’s stake in Travellers will drop to less than 3%. – Rappler.com