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Japanese group investing $10M in Panlilio resort firm

Boulevard Holdings eyes P13.5-B joint venture
/ 12:58 AM September 08, 2011

Boulevard Holdings Inc. has accepted a $10-million investment offer from a consortium led by Sumitomo Mitsui of Japan and is considering a P13.5-billion joint-venture proposal from an affiliate company for the development of the Puerto Azul resort complex.

In a disclosure to the Philippine Stock Exchange on Wednesday, BHI said its board of directors has approved Sumitomo’s offer alongside a P300-million private placement by affiliate JP Guilds Inc. at market price. Also approved was a plan by management to look for other possible private investors for BHI, a tourism-oriented firm led by the Panlilios.

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BHI shares were down 10.2 percent at P0.44 a share at the stock market following the announcement. Based on its last traded price, BHI had a market capitalization of P3.67 billion.

The disclosure also said BHI was considering a proposal from JP Guilds on a long-term joint venture to render marketing and financial representations in behalf of the 3,000-hectare Puerto Azul complex with “overage” share for BHI of 30 percent over a 30-year development strategy. The “overage” provision means that BHI will still gain from any future unlocking of values through future planning permission even if it no longer owns the land.

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The joint venture was valued at P13.5 billion based on the offer, which will expire on Nov. 30, the disclosure said.

“We look forward to this joint venture, when sealed, to unlock more value in the company’s real estate portfolio,” said Nisha Alicer, an analyst at DA Market Securities.

The company’s board of directors has constituted its outside directors into a committee to represent the “fairness” and interests of the minority shareholders. BHI and JP Guild have a common chair and president, Jose Marcel Panlilio.

The company’s board also approved the purchase of resort community developer Cala Paniman Inc. for P100 million, payable over seven years and in joint venture with local or foreign partners and credit facilities to be arranged with China Banking Corp. to fund Fridays Boracay Beach Resort’s ongoing expansion for $1.6 million.

Cala Paniman has a 21-hectare leisure estate project, Crestagrande Subdivision, along Paniman Bay in Cavite near the Puerto Azul complex.

BHI earlier sold its information technology business to focus on tourism ventures. Through a subsidiary, BHI owns and operates Friday’s Boracay Beach Resort, a luxury resort situated on Boracay Island that offers 47 rooms and facilities and amenities such as restaurants, function halls and other tourist-oriented activities. It is also building a luxurious native style resort in the exclusive Bouquete Island in Puerto Galera, Oriental Mindoro, aiming to replicate the success of the original Friday’s Resort in Boracay.

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TAGS: Business, Investments, Puerto azul, Tourism
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