Philrealty expects to cut debt by yearend

MANILA, Philippines - Property developer Philippine Realty and Holdings Corp. (Philrealty) expects to cut its debt to just P60 million by the end of the year through payment-in-kind scheme, a move seen to expedite its exit from rehabilitation.

On the sidelines of the company’s annual stockholders meeting yesterday, Philrealty president Amador C. Bacani said the first phase of its rehabilitation program, which calls for the settlement of its debt to five creditor banks, is expected to be completed this year with the fifth and last creditor agreeing to the dacion en pago arrangement.

Bacani said construction of the first of five Alexandra-inspired condominium towers in New Manila, Quezon City is now in full blast with the completion targeted in May or June next year.

The first tower, dubbed Andrea North Skyline, is now 40 percent sold with 200 remaining units up for sale at prices ranging from P3 million to P12 million. Around P1.3 billion to P1.4 billion is expected to be generated from the sale of these units. Pre-selling of the units will start next month.

Bacani said the five towers will offer a total 1,600 units with Andrea having 32 storeys and the rest averaging 28 floors. The company is aiming to build one tower a year.

The project will rise on the former the site of the Pepsi Cola plant.

He said management would decide whether to apply for exit from its rehabilitation program as soon as the first tower is completed.

From P829.5 million in 2006,Philrealty has managed to bring down its debt to just P532 million at the end of 2007, using cash generated from the sale of a lot in Fort Bonifacio and proceeds of a joint venture of another lot in the former military complex dubbed Icon Residences, a two 34-storey luxury residential condominium building.

The Icon Residences is now more than 90 percent sold with the first tower slated for completion in December 2009 and Tower 2 by the second quarter of 2010. This project is in partnership with Xcell Property Ventures Inc., led by shareholders of the old International Exchange Bank.

Philrealty filed for rehabilitation with the courts after being saddled with losses since the slump of the real estate industry in 1997.  – Zinnia dela Peña