MPC to sell part of Global City

Even without setting a minimum bid price, Metro Pacific Corp. (MPC) is confident it can generate enough cash from the sale of the right to develop an 18.9-hectare portion of the Bonifacio Global City, to service a substantial portion of its maturing debts within the next 12 months.

In a press briefing, MPC president and CEO Ricardo Pascua said the amount to be raised will be used to finance the vertical development of the Big Delta – a landmark portion hosting the commercial and entertainment complex, office and residential condominium buildings. Part of the sum will be used to service a P10.5-billion debt stock, about half of which will mature within a year’s time.

"This will allow the MPC Group to sustain earlier developments in the Global City, concentrate on projects that create additional impetus, generate income, and increase public patronage and customer traffic in the area," Pascua said.

MPC expects the bidding to attract large, well capitalized developers or a consortia of developers willing to accept and adhere to the Master Development Plan as the basic framework, although modifications and refinements would be allowed subject to MPC’s approval. Pascua said since they announced the sale late last week, one large local property developer has phoned in and inquired about the project.

The area, with a gross floor area of one million square meters, is located on the northern portion of the proposed central business district (CBD), just north of the existing S&R Price Club up to the Kalayaan gate of Fort Bonifacio. It is also adjacent to the University park where three major international schools (Manila Japanese School, British School and the International School Manila) are situated.

Under the proposed sales scheme, MPC will give up its rights to develop the area to a new company which will be spun off from Fort Bonifacio Development Corp. (FBDC) – the joint venture between the Bases Conversion and Development Authority (BCDA) and Bonifacio Land Corp., the private consortium that won the bid to develop Fort Bonifacio in 1995.

MPC controls 67.5 percent of BLC which, in turn, will bid out its 55-percent interest in the newly spun-off corporate vehicle. Pascua said the formation of the new company (NewCo) is underway at the Securities and Exchange Commission.

The proposed capital structure of NewCo will follow that of FBDC, where 20 percent is in the form of common shares and 80 percent in redeemable preferred shares. The shares will be booked at P1 par value.

Pascua said by issuing redeemable preferred shares, the winning group or corsortia will have the flexibility to form or disband, similar to the BLC consortium in FBDC wherein a number of partners have sold out to MPC after realizing gains on their investments.

Pascua said if the bidding proves successful, MPC could sell off more portions of the entire 150-ha. property under the same scheme. The MPC-led group originally paid for a 214-ha. area in 1995 but the BCDA failed to turn over a 64-ha. area located on the southern part due to problems in evicting illegal occupants.

The bulk of the development, however, is centered on the so-called Big Delta and the Expanded Big Delta in the southwest portion, representing 75 percent or about 111 has. of the land for development.