8990 increases shares for sale in follow-on offering

MANILA, Philippines - Low-cost residential developer 8990 Holdings Inc. has jacked up the number of shares it plans to sell to the investing public.

In a disclosure, 8990 Holdings said its board of directors “approved the increase in the number of shares to be offered in the follow-on offering.”

The follow-on offering will now involve as much as 1.24 billion shares, of which up to 862.18 million are primary shares and as much as 382.36 million are secondary shares.

In January, the Securities and Exchange Commission (SEC) allowed 8990 Holdings to sell 1.034 billion shares at a maximum offer price of P12.70 apiece, for a total transaction value of P13.13 billion.

“Further, an over-allotment option is proposed to be granted to a stabilizing agent covering a total of 134.95 million over-allotment shares, representing about 10 percent of the base offer shares,” 8990 Holdings said.

The property firm hired UBS AG (Hong Kong Branch) as the sole global coordinator, sole international bookrunner and lead manager while UBS Investments Philippines Inc. and SB Capital are the domestic lead underwriters.

“8990 Holdings intends to use the net proceeds from the offer for additional investment in subsidiaries, to fund their landbanking and working capital requirements including general corporate purposes,” the company earlier said.

In particular, it allotted P2.5 billion to acquire a 13-hectare property along Ortigas Ave. Extension in Pasig City and a 30-hectare lot in Davao City. Last month, the firm acquired several parcels of land in Pasig City for P2.2 billion.

It will also spend P2.5 billion for general working capital requirements and P1.4 billion for general corporate purposes.

The property firm is into mass housing projects under the Deca Homes brand for horizontal projects and Urban Homes brand for vertical projects.

In October, the corporate regulators approved the transformation of shell company IP Converge into 8990 Holdings.

Since starting its mass housing business in 2003, 8990 Holdings has completed 11 projects and sold 22,130 housing units in Luzon (Angeles, and Cavite), Visayas (Cebu province and Iloilo), and Mindanao (Tagum and Davao cities).

8990 Holdings is currently developing 15 projects in Cebu, Davao, Iloilo, Clark, Pampanga and other major hubs in the Philippines.

The company’s board also approved the proposed securitization transaction involving its subsidiaries.

The transaction includes subsidiaries assigning up to P1 billion of receivables from eligible contracts to sell to a special purpose unit.

In January to September last year, of 8990 Holdings earned P2.1 billion, up 64 percent from P1.28 billion a year ago. For the third quarter alone, the property developer’s income almost doubled to P589 million from P300.4 million a year ago while sales rose 27.6 percent to P1.23 billion from P964.35 million.

Apart from housing, 8990 Holdings is also in the business of resort and hotel development under the time share membership brand Azalea. It is also involved in the Deca Wake Board Park in Angeles and Davao.