Gotianun holding firm to spend P14B on new investments

Filinvest Development Corp. (FDC), the holding firm of the Gotianun family, has earmarked P14 billion for its capital expenditures this year and next, anchored on new investments, a possible bank acquisition, new residential projects and the expansion of its newly-acquired sugar refinery.

In a filing with the Securities and Exchange Commission, FDC said of the total programmed capital budget, P6.32 billion will be spent this year while the remaining P7.65 billion will be used next year.

In the first half of the year, FDC has already spent P4.56 billion of the planned capital budget for 2007.

FDC added that aside from the planned business expansions, it is also considering possible investments in the privatization of government-owned and controlled corporations.

FDC said funding will come from proceeds of its planned follow-on offering of shares and internally generated funds, as well as through borrowings.

The company’s board has approved the issuance of a maximum of 3.5 billion common shares through a primary and secondary offering, with an option to issue convertible bonds to the public. 

The proposed fund-raising activities are subject to the approval of FDC’s shareholders in a special meeting to be held on Sept. 7, 2007.

The company has long term debts of P8.71 billion, P157 million of which is maturing in the second half of the year, P374 million in 2008 and P4.605 billion during the period 2009-2011.

FDC has interests in residential property development through subsidiary Filinvest Land Inc., information technology, and banking and financial services through East West Banking Corp. (EMBC).

The group plans to beef up the capital of EWBC to prepare for the implementation of Basel II risks standard in the banking industry. 

FDC recently purchased Pacific Sugar Holdings Corp. from its biggest shareholder, ALG Holdings Corp., in a deal valued at P10.76 billion.  Pacific Sugar owns Cotabato Sugar Central Co. Inc., Davao Sugar Central Co. and High Yield Sugar Farms Inc.    ALG, which already owns 70.52 percent of FDC, will receive an additional 1.55 billion shares in FDC as payment.

Pacific Sugar owns and manages two sugar mills with a combined milling capacity of 9,000 tons per day. Its expansion program will increase its daily capacity to 15,000 tons, making it the second-largest combined milling capacity in Mindanao.

FDC reported a net income of P1.6 billion in the first quarter of this year, up 952 percent from the previous level on the back of higher real estate sales and one-time gain on the sale of its affiliate’s shares.

The group reported a net extraordinary gain of P1.1 billion from the sale of shares in FLI by  Filinvest Alabang, Inc.

Excluding the share sale, FDC’s net income still grew 213 percent to P470 million in the quarter. Net revenue from sales of lots, condominium units and club shares by sister companies FLI and  Filinvest Alabang amounted to P2.8 billion, nearly four times the previous level.