Terms for relocation of PSE bldg finalized

With the aborted plan of the Gokongwei group to take over a majority stake in Bonifacio Land Corp. (BLC), the respective boards of the Philippine Stock Exchange and Fort Bonifacio Development Corp. (FBDC) are now finalizing the terms of the relocation agreement that would provide a new building for the bourse within seven years.

PSE president Ernest Leung said they are now working on the final draft of the terms and conditions of the agreement which is expected to be taken up by the two boards by next week.

In February 1999, the PSE signed a deal with FBDC and Capital Consortium Inc. for the transfer and unification of the trading floors and offices of the Exchange to a 4,000 sqm. prime lot at the heart of Bonifacio Global City’s business district by the year 2004.

At present, the PSE headquarters are at the Tektite Towers in Ortigas, which, along with the Ayala Towers in Makati, operates two trading floors under a functional merger scheme. Both properties are similarly donated assets from Philippine Realty Holdings and Ayala Land Inc. whose 10-year deed of restrictions expires on 2004.

Aside from the lot, the FBDC-CCI group also offered to shoulder the establishment of a P250-million building to house the new Exchange, inclusive of the free construction design and detailed engineering plan.

But early last year, the Metro Manila Pacific-led BLC – the 55-percent joint venture partner of the Bases Conversion Development Authority (BCDA) in FBDC – offered to renegotiate the terms of the agreement which the previous PSE board balked at since the new offer was seen as disadvantageous to the Exchange.

The issue eventually divided the PSE board and led to the early exit of then PSE president Ramon Garcia when he openly challenged the influential FBDC chairman and then PSE board director Manuel Pangilinan.

But early this year, FBDC agreed to stick to the original deal although with some modifications which the PSE board and its stockholders accepted. Based on the new terms, FBDC will instead be donating the property within seven years from signing, thus freeing it up from its commitment by 2004, and has the flexibility to extend by two more years.

Under the conditional deed of donation, the title will be transferred through shares in a new holding company that will own the property. The donation of shares will be done in seven years which time the shares will be held in escrow.

PSE director Robert Coyiuto Jr. earlier urged FBDC to expedite the donation in view of the possible conflict once the Gokongwei group takes over BLC. Under the junked deal with MPC’s parent firm First Pacific, the Gokongwei group will shell out about $616 million for a joint venture that would control 24.5 percent of telecom giant PLDT and50.4 percent of BLC.

Coyiuto said in order to facilitate the transfer, the PSE members would be willing to advance the donor’s tax which FBDC has been concerned about "if only to expedite the immediate donation of the property to the PSE so that definitive plans for the construction of the PSE building can be finalized."

In addition, he said the PSE should have no problem committing to the use of the FBDC premises as its principal headquarters and main trading floor for at least seven years.