GT Capital eyes P9-B loans amid low-interest rate environment

MANILA, Philippines - GT Capital Holdings Inc., the investment vehicle of banking tycoon George Ty, said it plans to raise as much as P9 billion through loans to take advantage of low interest rates.

The holding firm reported a 51-percent surge in its core earnings to P3.9 billion in January to September, from P2.6 billion a year ago.

In a disclosure to the stock exchange, GT Capital said it mandated First Metro Investment Corp. to help it raise as much as P9 billion in long-term debt financing to support general corporate purposes.

“GT Capital has decided to tap the domestic debt capital markets in order to access the current record low interest rates and to optimize the company’s under-leveraged position,” said GT Capital chief finance officer Francis Suarez.

Late last month, the Monetary Board cut the Bangko Sentral ng Pilipinas’ key policy interest rates by 25 basis points to a record low 3.5 percent for overnight borrowing and 5.5 percent for overnight lending.

Meanwhile, GT Capital said its consolidated net income, which includes non-core earnings, more than doubled to P5.3 billion in the nine-month period.

Its consolidated revenues also more than tripled to P16.7 billion from P5.4 billion a year ago.

“The notable growth in revenues came from the expansion of component core businesses together with the consolidation of Global Business Power Corp. earlier this year,” GT Capital said.

The company added that it also benefited from improved net income from associates and a non-recurring gain of P1.4 billion from the company’s property arm Federal Land Inc.

“We are pleased to report that GT Capital’s revenue and profit results for the nine months of the year are on track,” said GT Capital president Carmelo Maria Luza Bautista.

“GT Capital’s expanding consumer-based businesses and increased direct ownership in its component companies enable it to further enhance shareholder value,” he said.

GT Capital, which listed in the local bourse in April, is into banking (Metropolitan Bank & Trust Co.), property (Federal Land), automotive (Toyota Motor Philippines), power production (Global Power) and pre-need (Philippine AXA Life Insurance, a joint venture with the global insurance giant AXA Group).

Specifically, Metrobank posted a 15-percent profit growth to P10.2 billion from P8.9 billion in the nine-month period while Federal Land recorded a 474-percent surge in income to P1.9 billion from P329 million last year.

“Federal Land sustained its vigorous sales momentum by properly addressing the persistent demand for primary homes through its high-quality, mid-market residential condominium projects,” said Federal Land president Alfred Ty, adding that this momentum will continue for the rest of the year.

For power generation, Global Power’s earnings nearly doubled to P2.1 billion from P1.1 billion last year.

“This was mainly a result of the full-year operations of its two newly-commissioned power plants in Cebu and Panay,” the company said.

Toyota Motors registered a net income of P2.5 billion, up 42 percent from P1.7 billion last year. AXA Philippines recorded an annualized premium equivalent of P2 billion, growing 31 percent from P1.54 billion a year ago.