Fairmont Holdings to acquire Empire East Properties, Inc.

Fairmont Holdings, Inc. (formerly BW Resources Corp.) will be acquiring Empire East Properties Inc., the low-cost housing division of its sister firm Empire East Land Holdings Inc., through a share purchase agreement worth P59.4 million, the company informed the Philippine Stock Exchange.

In a disclosure, Fairmont said it will acquire the assets of EEPI at book value, providing the company the vehicle to jumpstart its entry into the development of mass housing projects. EEPI has put up a low-cost housing village called Governors’ Hills in Gen. Trias, Cavite.

Fairmont earlier announced it would shift focus from tourism and leisure-related projects to housing development. It is also changing its corporate name to Suntrust Home Developers Inc. (SHDI).

Formerly known as BW Resources Corp., Fairmont will expand and gear itself up in the business of real estate development, mass community housing, townhouses and rowhouses development, residential subdivision and other massive horizontal land development projects.

The company said it will fund the acquisition through a P1 billion increase in its capitalization, or from P2 billion to P3 billion, which will be subscribed mainly by its parent firm, upscale property developer Megaworld Corp.

Megaworld owns 100 percent of Empire East Land and 72 percent of Fairmont. In early 1999, Megaworld and the then BW Resources entered into a joint venture agreement (JVA) for the acquisition of some P1.2-billion worth of the latter’s shares of stock in exchange for a real estate property – the Sheraton Marina Complex in Malate – owned by Megaworld.

By early 2001, or in the aftermath of the stock price-rigging scandal in BW, Megaworld took over BW’s management and operations from Dante Tan and Macau gaming kind Stanley Ho.

As part of its realignment, Fairmont will also swap a portion of its 30 percent equity in the JVA with Megaworld Corp. with completed residential units of Megaworld in the Marina Residential project.

Fairport said the swap involves the exchange of its equivalent net area for the same net areas owned by both parties. The exchange, it added, is within the same complex and will create a diverse portfolio of investments for Fairmont and does not, in any way, change the original sharing and value of the original JVA.