Filinvest gets SEC nod on P10-B fixed rate bonds

MANILA, Philippines - Filinvest Development Corp. (FDC) obtained the Securities and Exchange Commission’s nod to return to the capital markets to raise as much as P10 billion for its hotel and power ventures.

The Commission en banc approved the plan of the Gotianun family’s listed holding firm to sell P7 billion worth of bonds, with an overallotment option of up to P3 billion.

The 10-year fixed-rate bonds, which secured the highest credit score from Philippine Rating Services Corp., are set to be issued early next year.

“The net proceeds of the bonds will be utilized to partially finance projects that are being targeted to be undertaken by the company in the first quarter of 2014, the total capital expenditures of which amounts to P12.1 billion,” FDC said.

Specifically, the holding firm committed to repay P5.37 billion worth of loans, spend P3.49 billion to build Hotel Crimson in Boracay and invest P3.25 billion to put up a 405-megawatt (MW) coal-fired power plant in Misamis Oriental.

To date, FDC Hotels Corp. is in the planning and design stage for a five-star, 192-room Crimson Resort and Spa in Boracay Island that will start operations in 2016.

“It plans to break ground upon the approved of its application for Environmental Compliance Certificate with the Environment department,” FDC said.

For its part, subsidiary FDC Utilities Inc. is developing a 405-MW clean coal thermal power plant.

“Offtake agreements for 220 MW with 16 distribution utilities in Mindanao are already on hand and an additional 58 MW are still being negotiated,” FDC said.

The first two units of the power plant will start operations in 2016 while the remaining 135 MW is projected to be online in 2017.

“In addition to net proceeds, the company likewise intends to utilize internally generated funds considering that the projected total capital expenditure for 2014 is greater than the net proceeds of the offering,” FDC said.

For next year, FDC alloted roughly P33 billion for its capital expenditures to bankroll property development, hotel as well as power projects and at the same time fund the expansion of its banking business. The amount is way above the P20 billion spent this year.

In March, FDC raised $300 million after its offshore unit Filinvest Development Cayman Islands sold seven-year bonds, the first international bond offering of the holding firm since the late 1990s.

Aside from hotels (Crimson Resort and Spa at Seascapes Resort Town in Cebu) and power generation, FDC is also into property (Filinvest Land Inc.), banking (EastWest Banking Corp.) and sugar production (Pacific Sugar Holdings).

In the nine-month period, FDC’s consolidated net income rose 26 percent to P4.3 billion from P3.4 billion a year ago while consolidated revenues picked up 24 percent to P25.6 billion from P20.5 billion due to robust income from the banking and property units.