ALI Cebu affiliates to acquire stake in Aboitiz deal

MANILA, Philippines - Cebu-based affiliates of property giant Ayala Land Inc. (ALI) have secured board approvals to acquire a minority stake in a joint venture firm with the Aboitiz family.

In separate disclosures, Cebu Holdings Inc. (CHI) and Cebu Property Ventures & Development Corp. (CPV) said they have finalized the option to buy into the joint venture company of ALI and Aboitiz Land Inc.

Specifically, CPV’s board of directors approved the “acceptance of ALI’s assignment of the right to subscribe to 10 percent of the authorized capital stock of the joint venture company.”

For its part, CHI’s board also allowed management to buy five percent of the some joint.

Meanwhile, CHI said it will raise as much as P5 billion from the debt market to support general corporate purposes.

CHI’s board approved the “issuance of bonds in the amount of up to P5 billion, which are to be registered with the Securities and Exchange Commission and listed in the Philippine Dealing & Exchange Corp., will carry a tenor of up to eight years.”

Late in January, ALI gave its Cebu-based affiliates an option to buy into the joint venture vehicle. The acquisition is seen to benefit ALI and AboitizLand by boosting local knowledge and expertise for the project.

ALI and AboitizLand earlier forged a 50-50 joint venture deal to develop a 15-hectare property in Subangdaku in Mandaue City into a mixed-used city center.

The Mandaue City project will be ALI’s fourth major mixed-use district in Metro Cebu, following Cebu Business Park , Cebu IT Park and the upcoming Mactan development. The project will be AboitizLand’s 20th development in Cebu.

The joint venture project, which will feature innovative residential development, commercial spaces and office components, is targeted to be launched in 2015.

ALI , the listed property development arm of the Ayala conglomerate, is jacking up its capital spending to P70 billion this year as it commits to launch 78 projects worth P142 billion to ensure continuous growth in the coming years.

In 2013, ALI’s profits surged 30 percent to a record P11.74 billion from P9.04 billion in 2012 as consolidated revenues jumped 36 percent to P81.52 billion.