Filinvest sees rise in sales this year

MANILA, Philippines—Gotianun-led property developer Filinvest Land Inc. expects sales to rise in 2011 as it plans to accelerate expansion through higher spending compared to that of last year.

The company said the property market was still in the early stages of an upswing and that demand, particularly from the low to mid income sectors, would continue to grow amid the country’s massive housing backlog.

“If you look at the trends, the real estate market started to pick up in 2007, but there was a pause in 2008 and 2009 due to the global recession. So it’s just coming back and we are still just at the start,” Filinvest president Joseph Yap said.

“We do not see prices ballooning the way they did during the Asian Crisis a decade ago,” Yap told reporters after the company’s annual shareholders’ meeting yesterday.

Last year, the company’s revenue from sales reached P10 billion.

“Our target is to surpass that this year,” Yap said. “This year will still be a good year for the property sector.”

As a result, the company’s net earnings in 2010 hit P2.95 billion—up 46 percent year-on-year.

Strong demand for new homes has been partly driven by the availability of cheap loans from banks.

This year, Filinvest has set aside P12 billion for capital expenditures to fund the construction of new projects and the expansion of existing ones. This amount is more than double what the company spent last year.

Yap said the company would launch four low-cost housing projects, six “affordable” projects and two mid-rise residential developments this year, which would translate to P13 billion worth of sales once completed.

Also, Yap said the company would expand its available space for leasing activities by over a third in the next 24 months.

The amount of space the company has available for leasing contributes 31 percent to earnings.

For more details on Filinvest projects, you may contact Reby Ramirez @ +63 919.699.3572 / +63 922.883.9308 / +63 916.4044.555 / +632 404-4534 or e-mail her @ reby_ramirez@yahoo.com.

Lastly, FYI for related information on the new real estate law, RA 9646, please proceed to www.RA9646.com, the online repository of updated information on Real Estate Service Act of 2009 (RESA).

source: Philippine Daily Inquirer, April 15 2011

Filinvest eyes power generation, other projects under PPP

MANILA, Philippines - Filinvest Development Corp., the listed investment holding firm of the family of businessman Andrew Gotianun, is interested in the Public-Private Partnership projects being offered by the government.

FDC president Josephine Gotianun-Yap said the group is looking at some PPP projects, particularly on power generation, and expects to announce concrete plans in the next three to six months.

The local government is preparing 80 infrastructure-related projects worth about P740 billion. A handful of these may be auctioned off within the year.

The group has formed Strong Field Gas & Electric Corp., with an initial authozed capital of P16 million, to serve as its corporate vehicle for its venture into the power business.

FDC’s diversification into the power generation business will start with two coal-fired power plants planned in the Visayas and Mindanao with a total capacity of 300 megawatts.

FDC is in the process of applying for permits from the relevant governmental and regulatory authorities and is in negotiations with potential equipment suppliers and potential power off-takers with respect to each project.

With respect to the potential power project in the Visayas, FDC is also conducting a feasibility study with respect to a potential water desalination facility at the same site that would be operated using off-peak power from the proposed power plant.

The Filinvest Group is one of the country’s leading conglomerates, with interests in real estate through Filinvest Land, financial and banking services (East West Banking Corp.) and sugar manufacturing through Pacific Sugar Holdings.

Filinvest Land Inc., FDC’s 51 percent owned property unit, develops affordable and mid-income housing projects as well as tourism-related projects.

FDC also has 91 percent effective ownership in Filinvest Alabang Inc., developer of Filinvest Corporate City, Alabang – the premiere urban district in South Metro Manila.

East West is one of the fastest growing commercial banks with one of the highest return on equity in the Philippine banking sector while Pacific Sugar operates two sugar mills and two sugar refineries, and has corporate sugarcane farming operations.

The Filinvest Group has been in the residential business for over 45 years and has developed over 2,000 hectares of raw land into homes for more than 110,000 families, as well as over 600,000 square meters of office/retail and high-rise residential space.

For related information on the new real estate law, RA 9646, please proceed to www.ra9646.com, the online repository of updated information on Real Estate Service Act of 2009 (RESA).

source: Philippine Star, Apr 18 2011

Filinvest postpones follow-on share sale

It was a busy week in Asia's capital markets last week with three convertibles, one exchangeable and numerous follow-ons and blocks. But, in a clear sign that price is still an issue, both for investors and issuers, Filinvest Development Corp on Friday announced that it was postponing its follow-on offering, which had been due to price after the close of US trading last Wednesday.

The Philippine conglomerate, which is owned by the Gotianun family and has interests in property development, banking and the sugar industry, had been seeking to raise between Ps12.5 billion to Ps15 billion ($276 million to $332 million), excluding the 15% overallotment option, and was set to become the first equity offering of size to price in the Philippines this year.

The company said in a statement to the Philippine stock exchange that the decision to postpone was due to volatile market conditions.

“While there was ample demand from investors for an offering to be completed, the board has decided that the proposed offer price of its equity shares would not reflect the true value of the company,” it said.

The statement suggests that there may have been enough demand to cover the deal towards the bottom of the indicated price range, but that the management was not keen to sell at that price. And to push the price higher would have been difficult after the share price fell 15% on Tuesday through Thursday last week, reducing the indicated discount.

The drop in the share price didn’t come in isolation as several markets in Asia took a beating last week amid concerns about inflation. However, Filinvest did significantly underperform the broader Philippine market which fell 4.8% on Thursday through Friday last week and is now down slightly more than 5% year-to-date. That said, the company’s share price had just about tripled from having traded around Ps2 in the first half of last year to a high of Ps6.10 last Monday, so a bit of a correction was perhaps to be expected.

The deal was marketed without a specific price range during most of the roadshow, but on Tuesday last week the bookrunners said the deal would price between Ps5 and Ps6 per share. This indicated a discount of between 1.6% and 18% versus last Monday’s close. However, by the end of Thursday’s trading, that discount had shrunk to 3.5% at the bottom end of the price range. The top end implied a premium of almost 16%.

Investors may have been willing to accept a tight discount as the deal was viewed as a liquidity event and would have given them an opportunity to buy shares in bulk – something which had been difficult to do when the free-float was only 16% to 17%. Filinvest is also well regarded in the Philippine real estate sector and investors had indicated that they liked the offering as it would give them exposure to a cross section of the economy and the country’s GDP growth. However, to convince them to buy shares at a significant premium to the current market price may have been a harder sell.

Filinvest said in the announcement that it “believes it will have sufficient internally generated cash for its capital expenditure and expansion plans for the upcoming year.” It had earlier said that the money was to be used for the development of land and its hospitality business; to increase the capitalisation of its wholly owned banking business, East West Bank Corporation; for investments into infrastructure and utilities, which is a relatively new business for Filinvest; and for debt repayments.

However, the share price fell another 1.35% on Friday, which suggests shareholders were disappointed with the decision to postpone the fundraising.

Filinvest was looking to sell up to 2.5 billion shares, or a 33.3% stake in the company, through a so called top-up placement. The latter is the preferred method for Hong Kong follow-ons as well and essentially means that an existing shareholder sells a certain number of secondary shares through the placement and then subscribes to the same number of new shares issued by the company at the same price. The reason why they do this is purely technical and has to do with how quickly the shares can be made available for a sale.

The company kicked off the roadshow on January 5 and has since visited six cities in addition to Manila, including: Singapore, Hong Kong, London, New York, Boston and San Francisco. J.P. Morgan and UBS were joint bookrunners, with the latter also acting as the global coordinator.

For details on Filinvest projects, you may contact Reby Ramirez @ +63 916.4044.555 / +63 919.699.3572 / +63 922.941.4139 or e-mail: reby_ramirez@yahoo.com

For details on RA 9646 or RESA Law, please visit www.ra9646.com. RA9646.com is the central depository of all updates on the new law for the practice of real estate service in the Philippines.

source: Finance Asia, Jan 24 2011