Pro-friends to raise P7B via backdoor listing

MANILA, Philippines - Affordable housing developer Property Company of Friends Inc. (Pro-Friends), fresh from taking over a dormant listed company, is raising as much as P7 billion from a follow-on offering in the coming months.

Fresh funds will support expansion activities that focus on building communities nationwide, an official said late last week.

“We are already putting into motion the follow-on offering of Pro-Friends. The backdoor listing is already done because they already bought a listed company,” an informed source said late last week.

The official said Pro-Friends recently acquired Asiatrust Development Bank Inc. led by Dionisio Ong. In June 2012, Rebisco Group’s Asia United Bank Corp. took over the banking business of Asiatrust, which offered a range of banking and financial services to the small and medium enterprises.

Pro-Friends targets to raise P6 billion to P7 billion through a public share sale that will result in a 30-percent public float for the real estate firm, the official said.

The affordable housing builder, which was established in 1999, has built more than 25,000 housing units and completed 52 projects in Cavite, Iloilo and Metro Manila. It has 11 ongoing projects and 15 completed projects.

“They are a very progressive and active property company. Last year, they made P3.5 billion in net income,” the official said.

“They are serving the bottom of the pyramid, the low cost economic housing, which is the underserved segment of the property sector,” the official added. Based on industry estimates, there is a backlog of four million low-cost housing units but property firms build only 200,000 units a year.

The backdoor listing will allow Pro-Friends to benefit from tax efficiencies, the official said.

A backdoor listing occurs when a listed firm is acquired by a private company, resulting in a change in business. It is believed to be a cheaper and faster way to achieve a listing status.