Gotianun-led property developer Filinvest Land Inc. plans to raise P4 billion from a new bond offer within this quarter, using up its existing leeway for such debt issuance to fund expansion plans.
FLI’s conglomerate Filinvest Development Corp., for its part, is continuing to evaluate equity fund-raising opportunities, most likely through a “top-up” offering, as it forays into new businesses like power generation and infrastructure.
“There is no board approval yet of any offering for FDC but we have announced in the past that this is part of our program. (As to) when it will be done, there’s no agreed date. But all the groundwork is in place. The shares are available but there has been no decision yet on when to go out,” said Josephine Gotianun-Yap, president of both FDC and FLI.
For FLI, the property firm obtained approval from the Securities and Exchange Commission to issue P11 billion worth of bonds in 2012 but only P7 billion has been issued so far. “The balance of P4 billion will be issued within this quarter,” Yap said in a report to FLI stockholders last week.
Yap said the relatively low interest-rate environment enabled FLI to issue seven-year bonds at 6.27 percent a year last year. “We have kept the maturities of our debt well spread out to minimize the strain on our cash flow,” she said.
FLI’s debt offering was rated triple-A by local credit watcher Philippine Rating Services Corp., which cited the following factors: Healthy growth of real estate and leasing operations resulting in strong income generation; diversified portfolio; sound debt position and financial flexibility; established brand name, and favorable economic and industry conditions.
Asked about FDC’s prospective equity offering, Yap said the conglomerate was ready and would pursue the offering at the right time.
“If ever it will be a top-up,” Yap said. Under a top-up scheme, the issuer’s controlling shareholders will lend some of its secondary shares for a quicker equity deal and in the future subscribe to the same number of new common shares at the same price. This means that the proceeds will still go to the company.
Any equity fund-raising will go to power generation and hotel ventures.
“We don’t foresee any major requirement for the bank (East West Bank) and the property companies can take care of themselves as well,” Yap said.
But FDC was in no rush to tap the capital market despite some power projects already in the pipeline, Yap said, because part of the funding needs had been covered by proceeds from the secondary sale of shares when East West Bank went public last year.