FLI stocks shoot up 13.7% as trading resumes

Shares of Filinvest Land Inc. (FLI), a property firm owned by the Gotianun family, rose 13.7 percent upon the resumption of trading yesterday after having been suspended since Jan. 22.

FLI stocks hit an intraday high of P1.92 before closing at P1.82 per share on volume of 244.9 million shares following the company’s follow-on stock offer which raised nearly P8.7 billion.

The company offered 5.4 billion shares in both international and domestic markets at P1.60 per share or a 5.8 percent discount to the volume weighted average of its shares on the exchange for the 10 trading days ending Jan. 19 of P1.69.

The follow-on offering was more than five times oversubscribed with orders coming from 78 foreign institutional investors in Asia, United States, Europe and Middle East.

FLI president Joseph Yap said proceeds from the offering could reach up to P9.94 billion or $203 million once the greenshoe option is exercised.

UBS AG, FLI’s lead underwriter for the issue, said there is a strong possibility that the overallotment option would be exercised given the strong performance of the stock yesterday.

It has 30 days from listing date to decide whether the shares set aside for overallotment would be sold to meet the demand for FLI shares.

Of the shares offered, 3.7 billion came from FLI while the remaining 1.7 billion came from Filinvest Alabang Inc.

Yap said proceeds from the share issue will be used to fasttrack the development of 14 new residential projects in various parts of the country.

He said the company is very bullish on the property sector, which is picking up again after almost being crippled by the Asian financial crisis in 1997.

"This is the most number of projects we’re doing in many years since the Asian crisis," Yap said.

He said the company plans to put up three to four business process outsourcing (BPO) buildings annually to take advantage of the growing business.

Historically, FLI’s business has been focused on the development and sale of affordable and middle-market residential lots and housing units to the lower and middle-income market sector. Its subdivision lots are typically priced from below P120,000 to above P1.2 million while its housing units (which include the lot on which the house is built) are typically priced from below P300,000 to above P4 million.

In recent years, FLI has also started developing residential projects with a leisure component, such as farm estates and developments anchored by sports and resort clubs located relatively close to Metro Manila. It also recently diversified into investment properties through the acquisition of three strategic assets – the Festival Supermall, Northgate Cyberzone and PBCom Tower.

As of Sept. 30 last year, FLI had 60 developments under construction in 20 cities and municipalities located throughout the Philippines.

FLI has a landbank of 2,200 hectares, 81 percent of which is located in Southern Tagalog, which offers the strongest potential market for residential housing with annual demand of close to 13,215 of socialized units.

For this year, FLI has set aside P5 billion for its capital expenditures. Bulk of spending at P3.5 billion will go to residential developments and P1.5 billion for office developments. Among these projects include a condotel in Cebu, a new BPO office building, residential units, farm estates and a resort.

The Filinvest Group is one of the country’s leading real estate developers in the country, having developed over 1,800 hectares of land as well as over 400,000 square meters of office/commercial/high-rise residential space. It also has interests in banking.