Biz Buzz


Ongpin-Ashmore battle royale

All is not well between the House of Ongpin and its soon-to-be former “best friend forever” Ashmore Investment Management, apparently.

In fact, the relationship between what was one of the most aggressive investment tie-ups in town just three years ago has deteriorated to the point that either party has tried to take out the other from the multibillion-peso partnership.

According to Biz Buzz sources, the problem started during the annual stockholders’ meeting of Alphaland Corp. where its board of directors gave the executive committee the power to raise new funds with the backing of the company’s assets. During that same meeting, Alphaland chair and CEO Roberto Ongpin also declared that the 2010 shareholders’ agreement between his firms and Ashmore was invalid.

An alarmed Ashmore official wrote Ongpin reminding him that the old agreement was indeed valid and ordered that he reverse the Alphaland board’s decision. Ashmore pointed out that the shareholders’ agreement called for the UK-based investment fund to give its permission (through its two board representatives) before any financing can be raised by Alphaland.

But clearly, Ongpin’s recent troubles with some sectors of the Aquino administration weighed heavily on the minds of Ashmore bosses. It said it remained “committed to the future success” of Alphaland—which has billions of pesos worth of ongoing real estate projects and landbanking assets—despite the fact that adverse publicity about Ongpin was “hindering its prospects.”

Ashmore then asked that Ongpin resign from the Alphaland board, appoint a new Ashmore-approved chair and CEO and give the investment fund “first ranking security” over all the real estate developer’s unencumbered assets—all in return for a $50-million loan to Alphaland to boost its finances.

Naturally, Ongpin’s response was vintage Bobby Ongpin in a polite but firm letter, in which Ongpin said that it took Ashmore almost three years to provide him a copy of the shareholders’ agreement in question. (“Three years is by any measure beyond what anyone may consider a reasonable period.”) Once he was given a copy, he said he found it to have provisions that contravened Philippine laws and Alphaland by-laws. These include giving Ashmore preemptive rights, even if this was denied by Alphaland’s articles of incorporation; the requirement to have at least one Ashmore representative present before a board meeting could have a quorum, and the presence of at least 75 percent of shares before a shareholders’ meeting can be called.

“I do not need to remind you that Alphaland is a Philippine corporation,” Ongpin said. “It is therefore governed by Philippine law. It is basic that under Philippine law, no agreement can be effectively and validly enforced if it is in contravention of law.”

Finally, he addressed Ashmore’s $50-million offer. “No one can ever make me resign from Alphaland even if Ashmore were to make a $50-BILLION (emphasis his) loan offer to Alphaland,” Ongpin said. “I think the sooner you come to that realization, the better off we shall all be.”

It’s a battle royale and it looks like Ongpin is set to lose his company’s biggest funder. But then again… this tiff puts a big, gaping hole in the rumor that Ashmore is a front for former First Gentleman Jose Miguel Arroyo in Ongpin’s businesses. Win some, lose some.  Daxim L. Lucas

All eyes on PAL

All eyes were on Philippine Airlines last week as the European Union selectively lifted a ban on Philippine air carriers.

The one-two punch here, of course, would be the upgrade to Category 1 status from the current Category 2 by the US Federal Aviation Administration (FAA) possibly within the year, which is what the Civil Aviation Authority of the Philippines is expecting.

PAL president Ramon Ang said this would allow Philippine Airlines to expand its flights not only to the United States but also enable the airline to finally mount trips to São Paulo, Brazil.

The Philippines earlier concluded successful air talks with Brazil but Ang said the route, which will involve flying from Manila to Los Angeles and then to São Paulo, could not be used with the current restrictions because of the current Category 2 status.

Ang, meanwhile, said he believed the airline would earn profits from its return to Europe after 15 years despite stiff competition from carriers based in the Middle East.

He said PAL only has to be competitive in terms of pricing. With PAL set to offer non-stop flights from Manila to Gatwick Airport near London, which would take half the time versus the estimated 24-hour trip with layovers, he said passengers would no doubt switch to PAL. Miguel R. Camus

Eye on the Warriors

The Filipino chief of Hong Kong-based First Pacific, Manuel V. Pangilinan aka MVP., turned 67 Sunday (July 14) and what could be a better birthday gift to one’s self than to continue shopping around for a National Basketball Association franchise? Talks over Sacramento Kings have gone nowhere but we heard that MVP has set his eyes on another US basketball team from the Pacific division of NBA’s Western Conference.

MVP’s new target is Oakland, California-based Golden State Warriors, Harvard boy Jeremy Lin’s first professional basketball club but that was long before his “Linsanity” days with the New York Knicks and current place with the Houston Rockets. Golden State Warriors has recently been signing up big names in American basketball and building a new stadium in San Francisco, said to be one of MVP’s favorite cities in the United States.

“Talks are moving,” said a source close to MVP. Apart from the chance to be immortalized as the first Filipino to hold an NBA franchise, MVP sees this as a good platform to bring the first Filipino (or Filipinos) to pay in the US big league, thereby elevating Philippine athletics to the global spotlight in the same way like Yao Ming did for China.

If and when MVP bags the Warriors, we will not be surprised if his team makes an attempt to woo Erik Spoelstra, the Filipino-American Miami Heat head coach of 2013 NBA champion Miami Heat, into joining the club. That’s just wishful thinking for now. Doris C. Dumlao

Asia’s Broadway?

It is often said that, all over the world, where there is entertainment, Filipino performers can be found. Whether they are singers, dancers, acrobats or even mascots, Filipinos just love the thrill of performing. Well, integrated resort operator Resorts World has taken notice and is inviting back Filipino performers abroad to complement the local talents.

“We want to make the Philippines the Broadway of Asia. This is our company’s ambition,” Resorts World Manila COO Stephen Reilly said in a forum for business leaders in the hotel and tourism industry. “The talent is here; this is the place it has to be.”

But first, building on the successes of “The King and I,” “The Sound of Music” and before that, “Chaos” with its live animals and a touch of Cirque du Soleil, Resorts World visitors are in for another entertainment special.

“In October, we’re going to do another classic,” Rilley said. “We’re going to do Cinderella.”

Not only that, Resorts World is opening up another theater in Entertainment City. “Newport Performing Arts Theater was our first prototype and it has done extremely well. Our next one is going to be bigger, grander,” Rilley said.

If the shoe fits, so to speak, the Philippines’ climb to become Asia’s Broadway certainly will make our entertainment sector feel like Cinderella. Riza T. Olchondra

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  • manufacturer2

    “this tiff puts a big, gaping hole in the rumor that Ashmore is a front for former First Gentleman Jose Miguel Arroyo in Ongpin’s businesses”

    No it does not. Seven years to launder all the money stolen was enough to make all the money clean. Hence, the parting of ways.
    Mr. Lucas, I know you are not a neophyte. Please stop writing like one.

  • Dennis Valdes

    Letter to the Editor from Roberto V. Ongpin:

    I write in reaction to the column of Mr. Dax Lucas in Bizz Buzz of today’s issue. I believe it is incumbent upon me to correct and put in perspective the comments made by Mr. Lucas, in fairness to the Ashmore Group and myself.

    In his article, which is generally accurate in most aspects, Mr. Lucas makes it appear that there is a “battle royale” between Ashmore and myself which is brewing or actually raging. Unfortunately, whoever provided Mr. Lucas with copies of email
    exchanges between myself and Ashmore either deliberately or inadvertently never explained to him that these email exchanges were at least 3 to 4 months old, and
    what he concludes would be a “battle royale” was in fact never fought, because the issues between Ashmore and myself have been peacefully and amicably resolved.

    The only thing that I am pleased about is Mr. Lucas’ conclusion that the “battle royale” between myself and Ashmore should once and for all debunk the fairy tale that the Ashmore money which was invested in Alphaland is not really Ashmore’s money but that of former First Gentleman Mike Arroyo.

    People who understand the private equity fund business know that these funds normally have a 7-year life. The relationship between myself and Ashmore started in
    2006 and is now nearing its 7-year life which means that the invested funds need to be liquidated and returned to the investors in the fund.

    I do not deny that there were issues and disagreements between Ashmore and myself. Ashmore made it clear to me that no more funds would be available from Ashmore for Alphaland. Thus, we went on to explore several possibilities whereby a third party or even myself would acquire the Ashmore investment in Alphaland. Thus, it is a fact that the “battle royale” was never fought and never happened.

    In fact, a few weeks ago, an investment group, which for obvious reasons cannot be named at this time, agreed with Ashmore to buy the Ashmore stake in Alphaland. The price has been agreed, and they are now going through the final drafting of the various agreements that are required.

    I feel constrained to write this letter to clarify that in fact Alphaland is not “losing” its funding source (Ashmore), but is in fact gaining a new investor which will continue to support the Alphaland projects. My own belief is that in fact, the new investor will be more aggressive in backing Alphaland projects because it will not be operating under any 7-year funding constraint.

    Finally, I would like to say that I will always be grateful to Ashmore for having backed me for the last 7 years. Without their financial backing and support, the projects of Alphaland, including such “jewels in the crown” as Balesin Island Club, Makati Place, Alphaland Tower, Alphaland Marina Club and several other major projects would
    never have come into existence.

    Very truly yours,
    Roberto V. Ongpin

    • manufacturer2

      Mr. Valdes, stop trying to defend your uncle
      by printing his letter on your wife’s family’s newspaper.
      He has been and always will be a crony. Whether
      its Marcos or Arroyo. Whenever he is in the news, it is
      because his “friends” are in power and not because of his
      business acumen. Tell me, what was his net worth from 1987-2005
      when he didn’t have a friend in Malacañang? Was he in the news then?
      Was he involved in anything of significance in business here in the Philippines during those times?
      Buko na siya sa sambayanan. Itigil na ang pag mamalinis niya.

  • Weder-Weder Lang

    Paging CBCP, watch your investments in Ashmore and Alphaland closely. It’s bad enough you can’t bring your wealth into the afterlife. It’s even worse when you lose your paper wealth because of Ongpin-Ashmore infighting.

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