The PSE’s building committee has gone back to the negotiating table with FBDC after the Metro Pacific-led consortium developing the Bonifacio Global City in Makati tendered its formal offer sheet for the relocation of PSE last Sept. 26.
While PSE officials said the offer was a reasonable one compared with the original relocation agreement in 1999, several more refinements in the project term sheet have to be amended, hence the need for continued negotiations.
Among the major changes the PSE wants is the shortened period for the delivery of the building from 10 years to seven years from signing of the agreement and a two-year extension in the mandatory occupancy clause from the five years proposed by FBDC to seven years.
Even the type of agreement has been revised from the original relocation deal to a joint venture type of development wherein PSE has the option to engage in a comunidades concept where brokers with FBDC and/or other developers can construct the building as co-developers.
The PSE will be moving its headquarters and trading floor to Lot 9-5, a 2,182-sqm portion at the Capital Place, the so-called financial center of the Bonfacio Global City, with a gross floor area covering 26,184 square meters.
A holding company, tentatively named PSE Development Corp., will be formed to hold the property under a tax-free exchange scheme for FBDC. While FBDC wants the shares of the holding company delivered in 10 installments of 10 percent each, the PSE – opting for a faster delivery period of seven years – wants it changed to 10 percent of the shares delivered at each of the first six years and the balance on the seventh year.
However, the PSE said FBDC has the option on the seventh year to request for an extension period for the delivery at not more than 10 percent every year subject to mutual agreement.
In the meantime, the holding company’s shares will be held in escrow by a PSE-chosen bank and all voting rights accruing will be assigned to the PSE outright.