FELI now debt-free

MANILA, Philippines - Fil-Estate Land Inc. (FELI), a property firm recently taken over by real estate tycoon Andrew Tan, is now virtually debt free with the full payment of a revolving credit facility and the redemption of convertible bonds issued in 2008, a development seen to bring the company back into the mainstream.

In a disclosure to the Philippine Stock Exchange, Fil-Estate said it redeemed all of its five-year convertible bonds, amounting to $25 million, and fully paid all its debts using proceeds from the P5-billion cash infusion made by Tan’s listed holding firm Alliance Global Group Inc. (AGI).

The convertible bonds were issued in November 2007 and January 2008 under a convertible bond facility agreement.

“As a result of the redemption of the convertible bonds and full payment of the revolving credit facility, the company is once again virtually debt free and without any debt service burden, save for a term loan of a wholly-owned subsidiary from a local bank,” Fil-Estate said.

AGI’s investment was made through subscription to Fil-Estate’s increase in authorized capital from P5 billion to P10 billion. The company subscribed and paid the entire P5-billion capital hike, equivalent to nearly 60 percent of Fil-Estate.

With the subscription, Tan has been designated chairman and president of Fil-Estate, which will be renamed Global Estate Resorts Inc.

The group of businessman Robert John Sobrepena retained a fifth of Fil-Estate, which used to be a premier real estate developer until the 1997 currency crisis gripped Asia and brought down the company.

AGI’s purchase of a majority stake in Fil-Estate is expected to boost the latter’s bid to reclaim its leading position in the industry, backed by the financial muscle of the real estate firm’s new majority owner.

AGI is also seen to benefit from the purchase as it gives them ample landbank for future expansion and positions itself on the growing tourism industry.

Fil-Estate owns more than 1,000 hectares of tourism-oriented communities in the country’s prime tourist spots which include Tagaytay and Nasugbu, Batangas.