FLI mulls offshore funds for debt payments, capex

Filinvest Land Inc. (FLI), the real estate development firm of businessman Andrew Gotianun, plans to raise funds in the international market to pare down its debts and finance capital expenditures.

In a disclosure to the Philippine Stock Exchange, FLI said it is "exploring opportunities to raise funds in the offshore market primarily to refinance existing liabilities and for additional working capital requirements.

FLI said it intends to hedge the currency risk of any offshore fund-raising it will undertake. It has appointed JP Morgan to advice the company on these market opportunities.

FLI vice-president Fely T. Ramos said earlier the company intends to issue P1.5 billion worth of five-year bonds early next year to ease down its loan obligations which have become a drag on profitability over the past three years. The company has P2 billion worth of bonds maturing in November 2004 which will be redeemed through internally-generated funds.

The firm has earmarked P800 million for its capital expenditures this year which include the development of existing and new affordable housing projects.

The company will be repackaging some of its projects to cater to the middle-income segment. It is looking at reducing the lot sizes of its housing projects and slashing prices to cater to a wider market.

With the successful launch of its first farm estate project, the Bali-themed Nusa Dua in Tanza, Cavite, FLI is now planning to develop its second project in the eastern part of Rizal.

Other projects in the pipeline include a club resort in Tagaytay and a nature and sports club in the foothills of the Sierra Madre in Rizal.

The Gotianuns entered the real estate business in 1967 through the establishment of Filinvest Realty Corp. and in 1984 consolidated their real estate interests in Filinvest Development Corp. In 1993, FDC transferred to FLI the real estate business.