Metro Pacific gives up majority control of Landco

MANILA, Philippines - Metro Pacific Investment Corp. (MPIC) is reducing its stake in property development company Landco from a majority 51 percent to 30 percent, after agreeing to sell part of its shareholdings to AB Holdings for P220 million.

With the sale, AB Holdings will increase its stake in Landco from 49 percent to 70 percent.

MPIC has decided to sell a portion of its stake in Landco in order to focus on its other businesses (infrastructure and healthcare) although it has opted to retain a minority stake in Landco.

When asked whether AB Holdings was given the option to acquire MPIC’s remaining 30-percent stake in Landco, an AB Holdings official said this matter has not been discussed although this is a possibility.

“They (MPIC) are open to it,” the official said.

AB Holdings was earlier in discussions with investors to finance the acquisition of the Landco stake but the talks did not prosper, leading AB Holdings to finance the purchase by itself.

An AB Holdings official told The STAR that they will be purchasing assets from Landco and use them to pay MPIC for the 21-percent additional stake.

Meanwhile, an earlier P500-million loan acquired by AB Holdings from MPIC will be paid using Landco’s shares in three mall corporations, namely NE Pacific Mall in Cabanatuan, and Pacific Mall in Legazpi and Lucena. If these assets will still not be enough, AB Holdings will cover the balance of the loan with other Landco assets until fully paid, the official said.

Despite the transfer of ownership of the malls to MPIC, Landco will continue to run the malls. “They (MPIC) prefer the status quo,” the official said.

An agreement in principle was reached between MPIC and AB Holdings although nothing has been put in writing. MPIC president Jose Ma. Lim revealed that the deal will be finalized in the next five to 12 weeks.

There will be no changes in Landco’s focus despite the dilution of MPIC’s stake and the new majority owner.

A company official said Landco will continue to pursue a strategy of focusing on the development of leisure communities.

However, Landco will also develop businesses in hometown in urban communities, which primarily involves the development of residential subdivisions.

The official also disclosed that the company is not looking at developing new projects this year, but instead will focus on expanding existing ones. These include the Calatagan project, Playa Laiya in Batangas, Playa Azalea in Davao, Woodgrove in Pampanga, Woodridge in Zamboanga and Phase 2A of the Hacienda Escudero project.

Landco is currently in talks with investors interested in developing a hotel in Calatagan, possibly via a joint venture with the company.

In October 2008, Landco launched Playa Azalea, a joint venture project with Anflocor Management and Investment Corp. of the Floirendo family in Samal Island, Davao. The 33-hectare project, which is going to be the first leisure tourism estate in Davao, will be a world-class mixed-use seaside commercial- residential enclave offering a magnificent view of Mt. Apo.

MPIC earlier announced that its board of directors has approved the divestment from Landco, signaling the holding company’s exit from the real estate business.