Biz Buzz: San Miguel’s mega-airport
It was a few years in the making but San Miguel Corp. president Ramon S. Ang had to make sure that the timing was right and all potential legal issues were clarified before proposing the massive $10-billion airport project to Malacañang as an alternative to the congested Ninoy Aquino International Airport.
Ang said SMC had done extensive legal research and feasibility on this project, which the conglomerate proposed to build, transfer and operate for the government. He also said that a big law firm—allegedly commissioned by a big businessman who wants to stall the reclamation along the area started by Cyberbay Corp.—had done a lot of stonewalling in the past to stop this reclamation project.
“Everyone else was able to reclaim [land],” he said, expressing confidence that this project can withstand legal scrutiny.
One of the earlier stumbling blocks considered by SMC, for instance, was a policy in the Mactan airport bidding that a company with a stake in airline operations can’t own more than 40-percent of Cebu’s airport concession. Another SMC source said only the Mactan airport is deemed covered by this restriction. To date, the SMC group leads the airport concessionaire in Caticlan, gateway to the world-famous Boracay Island.
“Very happy,” Ang said, when asked how he would describe President Aquino’s reaction last Wednesday to his presentation on the airport project. If the government were to privatize the 400-hectare area where the current NAIA airport stands on, he said this could easily raise from $10 billion to $15 billion.
Meanwhile, Cyberbay Corp. said on Thursday it had no participation in the proposal, which is true because it is SMC that proposed to build the airport. Also, only 157 hectares out of the 1,600 hectares needed for the project had been reclaimed and all Cyberbay has in its books are receivables from Philippine Reclamation Authority. Ang, who has a personal investment in CyberBay, himself said the latter could have a “small” stake. But it’s essentially an unsolicited project by SMC, which will be subject to a Swiss challenge.
Ang is confident that no other local group would be bold enough to challenge SMC’s proposal for such a massive local infrastructure project. And even assuming that there is one, the original proponent can always match the best counter-offer.—Doris C. Dumlao
Trouble at Capitol Hills
Some shareholders of Capitol Hills Golf & Country Club are raising a howl over the “questionable status” of the organization that was once home to a championship golf course.
Apparently, that vaunted championship course is no more—whittled away over the years by the decision of the club’s leadership to sell parts of the property to real estate developer Ayala Land Inc. (which developed the adjacent Ayala Heights upscale gated community).
One club shareholder, Andy Dumlao, has even complained that Capitol Hills Golf & Country Club Inc. (CHGCCI) had ceased to exist as a corporate entity since January 2010 “and by operation of law cannot continue to conduct business.”
But of course, it still does, because the Corporation Code allows the club three years “to convey all its property to trustees for the benefit of the stockholders, members, creditors, and other persons in interest.”
“It is my understanding that the current board had constituted itself as board of liquidators sometime in June 2011 but to this date, shareholders have not received any formal report of its proceedings or results,” Dumlao said.
His bigger concern is what the current board intends to do with the remaining premium real estate that the golf course sits on.
“There was a time when the club had 27 holes with nine of them lighted,” he said. “What remains now of the current golf course is a much shorter, par 62 ‘executive course’ which has given way to Ayala Land’s Ayala Heights subdivision. It is not surprising therefore that the current 11-man board is composed of seven nominees from Ayala and four from the previous management group.”
Attempts to have a dialogue with the club’s chair have proved futile, and now Dumlao wonders if the leadership’s move of “keeping us in the dark” about the liquidation process is “a ploy so that Ayala Land can continue to take over the remaining property to develop and sell at a tremendous profit but to the exclusion of CHGCCI shareholders.”
Dumlao’s request is simple: convene a special stockholders’ meeting for the board to apprise members of the latest developments. Sounds reasonable.—Daxim L. Lucas
GIC in hospitals
After investing in Century Canning Corp., the holding and management company of the Po family, sovereign wealth fund Government of Singapore Investment Corp. (GIC) is said to be buying into the hospital business of Metro Pacific Investments Corp. led by businessman Manuel V. Pangilinan, a.k.a. MVP.
From what we hear, MPIC will keep 60 percent of the hospital business while ceding 40 percent to GIC. This must be another reason why MVP had been frequenting Singapore recently—to bring some Singaporean financial muscle to the fast-growing chain of hospitals in the Philippines.
Prior to GIC’s equity deal in MPIC Hospitals and Century Canning, GIC’s last major investment in the Philippines was in November last year when it acquired a 5.6-percent stake in Ayala-led Bank of the Philippine Islands.—Doris C. Dumlao
Speaking of M-VP…
As the race for the presidency in 2016 nears, Vice President Jejomar Binay—who has been vocal about eyeing the top post in the land—has also become busy speaking and meeting with businessmen for several reasons.
“I’ve been receiving a lot of invitations to events like this,” Binay told the Employers’ Confederation of the Philippines-led 35th National Conference of Employers on Thursday. “I’m now under close scrutiny by the business sector.”
To keep himself healthy in order to fulfill his mandate “until 2016 and beyond,” Binay religiously exercises by walking 10,000 steps daily, ECOP president Edgardo Lacson noted when he introduced Binay who was the keynote speaker.
It seems, though, that those interested to be Binay’s running mate in the next elections have been moving faster to convince the potential future president.
When asked by Biz Buzz if he’s negotiating with a businessman whose initials sound like “VP,” Binay said: “Pinag-uusapan pa.”
Further pressed if this tycoon is the only one he’s considering to be his running mate, Binay replied: “May negosyante, among others.” Place your bets, ladies and gentlemen.—Ben O. de Vera
Ayala in Solaire
Ayala Land Inc. is probably the most reluctant among the country’s property developers to rush into the gaming property play, but it can at least have a retail play in one.
ALI has signed a deal with Bloomberry Resorts Corp.’s wholly owned Sureste Properties Inc. to manage a portion of the retail space to be opened as part of Solaire Manila’s Phase 1-A expansion.
ALI will be the leasing and marketing agent of a retail area with a gross leasable space of more than 5,000 square meters and is expected to bring premium brands to complete Solaire’s offering.
For its part, Bloomberry expects to jack up local non-gaming revenues as Solaire opens a new wing, including a shopping mall component, under its expansion program by October this year—during which neighbor/rival City of Dreams Manila is likewise scheduled to debut.
This phase 1-A expansion of Solaire is targeted to provide an additional 200 slot machines, 65 gaming tables, a new 300-room all-suite boutique hotel tower, restaurants, a retail promenade with over 20,000 square meters of leasable space, a performance theater with up to 1,800 seats, a nightclub and a parking facility with space for about 3,500 cars.—Doris C. Dumlao
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