MJC eyes P48.19-M stock rights offer to fund racetrack

The Manila Jockey Club (MJC) plans to raise P48.19 million through a stock rights offering in order to fund the development of a new horseracing track in Carmona, Cavite.

In its registration papers approved by the Securities and Exchange Commission, MJC said the pre-emptive rights offer would entitle the existing stockholders to subscribe to an additional 0.93 of a share for every share held at a price of P1 each.

A stock rights offer is an option given to stockholders to buy additional shares at a price lower than its market price. While this exercise will result in the expansion of the company’s outstanding shares, this will also involve a convenient capital raising scheme for the firm.

MJC, which runs the San Lazaro Hippodrome in Sta. Cruz, Manila, has roughly 51.81 million outstanding common shares out of an authorized capital base of 100 million shares, at P1 par value.

Earlier this month, MJC said it would relocate its horse racing facility from the San Lazaro Hippodrome to a 77-hectare lot in Carmona to pave the way for the old site’s development into a mixed-use real estate project anchored by the SM mall chain.

The project will be undertaken by KPPI Land Corp., a unit of Kuok Philippine Properties Inc.

Last April, MJC granted SM Prime Holdings, the holding firm for the SM Group’s mall operations, the right to develop and put up a shopping mall in a four-hectare portion of the San Lazaro property.

Under the terms of the agreement, SM Prime will be given a call option or the right to purchase on a staggered basis over a span of three years the shares of stock of San Lazaro Holdings Corp., a wholly-owned subsidiary of MJC which holds the four-hectare property.

As of end-June 2001, MJC had posted gross revenues of P137.724 million. With lower operating expenses, its bottom line improved to a net income of P6.783 million.

For the past two years, MJC was in the red, posting losses of P16.28 million and P26.327 million in 1999 and 2000, respectively. – Conrado Diaz Jr.