Signing of CAP deal deferred

The signing of a memorandum of agreement (MOA) between College Assurance Plan Philippines Inc. and a local property developer will have to wait for two to three more days pending the finalization of the terms of the deal, a high-ranking CAP official said yesterday.

The MOA was set for signing yesterday but had to be deferred to allow lawyers to structure the deal in a way that will be more cost efficient. "Lawyers are still finalizing the structure of the deal to make it more tax efficient," the CAP official said.

The local realty firm will infuse a 3,000-hectare property valued at P6 billion or P200 per square meter. The value of the property is seen to grow to P2,500 per square meter when fully developed. CAP is looking at developing the property into an educational center where it could sell land to schools.

Apart from this, CAP is optimistic of signing a memorandum of understanding with its prospective foreign investor which shall lend $127 million with CAP’s Metro Rail Transit bonds worth P3.4 billion as collateral. The second tranche of the agreement calls for the investment of $100 million in fresh capital.

With all these investments in place, CAP expects to raise as much as P18 billion which should be enough to cover the future deficiency in its trust fund. This is also expected to make CAP the country’s biggest pre-need company with a capitalization of P11 billion.

The Sobrepeña group is expected to retain six out of the 11 board seats in CAP with the foreign investor getting a total of four seats and the property developer owning one seat.