PSE president Ernest Leung told reporters said both parties are working a deal to enable the bourse to relocate at an earlier period in exchange for advancing to FBDC a loan that would correspond to the latter’s donor’s tax.
"The donor’s tax can be advanced in the form of a loan to the owner with interest to be charged only upon turn-over," he said.
PSE and FBDC are set to finalize the terms of the relocation in a contract that will hopefully be signed before the year ends. Under the deal, FBDC and its partner Capital Consortium Inc. will donate a 2,182 sqm parcel of land (Lot 9-5) at the Bonifacio Global City to house the PSE’s new headquarters and unified trading floor.
At present, the PSE has its headquarters at the Tektite Towers in Ortigas where it operates a trading floor. It operates a second trading floor at the Ayala Towers in Makati. The two properties are donated by the Philippine Realty Holdings and Ayala Land Inc. whose 10-year deed of restrictions expire in 2004.
FBDC, a joint venture between the Metro Pacific-led Bonifacio Land Corp. and the Bases Conversion Development Authority, will build and donate the PSE premises subject to a budget limit of P250 million within a period of seven years, extendible by another two years.
A holding company, to be called PSE Development Corp., will own the property under a tax-free exchange scheme, although FBDC is still liable for the donor’s taxes on the delivery of shares to the new company. Under the conditional deed of donation, the title will be transferred through shares in the new holding company while the donation of shares will be done, on a staggered basis, within seven years, at which time the shares will be held in escrow.
The 30-percent donor’s tax would amount to about P218 million for the said property, based on a zonal valuation of P100,000 per sqm.
With BLC finding itself in a financial bind due to the debt woes of its parent firm Metro Pacific Corp., the PSE – which is not in a comfortable financial position either – has offered to shoulder the donor’s tax in the meantime to expedite their transfer.
In fact, PSE director Robert Coyiuto Jr. earlier said the PSE members would be willing to advance the donor’s tax which FBDC has been concerned with, "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."
Coyiuto’s call was made in view of the possible conflict raised by the failed takeover of the Gokongwei group. 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 and 50.4 percent of BLC.